Italian manufacturing activity rebounds in July: PMI

ROME (Reuters) - Italian manufacturing activity rebounded in July, hitting its highest level since June 2018, a survey showed on Monday, raising hopes that the economy was on the road to recovery following the coronavirus lockdown.

The IHS Markit Purchasing Managers' Index (PMI) rose to 51.9 last month from 47.5 in June, climbing above the 50 mark that separates growth from contraction for the first time since August 2018.

The median forecast in a Reuters survey of five analysts had pointed to a reading of 51.0.

The index slumped to a record low of 31.1 in April, reflecting the closure of most Italian factories in an effort to halt the spread of COVID-19. Plants were allowed to reopen in May, and the index has now climbed for three months running.

IHS Markit's subindex for output at manufacturers rose to 54.7 in July from a previous 50.8, continuing its revival from a low of 11.6 registered in April to post its strongest reading since March 2018.

The euro zone's third-largest economy contracted 12.4% in the second quarter from the previous three months and 17.3% year-on-year, preliminary data showed on Friday, but the fall was less severe than many analysts had predicted.

(Reporting by Crispian Balmer; Editing by Hugh Lawson)