Italy's manufacturing confidence indicator rose to 89.9 in August 2026, the highest level since June 2023, up from 89.7 in the previous month, broadly in line with expecations. Firms reported a more negative assessment of total orders (-20.4 vs -17.1), reflecting pessismism over foreign orders (-23.9 vs -22.1). Meanwhile, views on current production deteriorated (-19.6 vs -17.8), remaining in negative territory, while a buildup in inventories further increased (3.8 vs 2.8). Looking ahead, production expectations improved (9.6 vs 4.5), although inflation expectations strenghened (15.5 vs 15.3). Regarding future employment levels, sentiment deteriorated, with the indicator declining to 1.5 from 4.4. Meanwhile, Italy's overall business indicator increased to 96.9 from 95.7, supported by improvement in confidence across sectors, particularly in contruction.