Italy's service sector contracts in August for first time in 2023 -PMI
Reuters
Published Sep 05, 2023 03:51AM ET
ROME (Reuters) - The Italian services sector contracted very slightly in August - the first time it has done so this year - signalling the possible start of a recession in a key segment of the euro zone's third-largest economy, a survey showed on Tuesday.
The HCOB Purchasing Managers' Index (PMI) for Italian services came in at 49.8 in August, down from 51.5 the previous month and below the 50 level that separates growth from contraction.
The result was lower than expected, with a Reuters survey of eight analysts pointing to a figure of 50.2.
The survey's new business indicator declined to 48.1 from a previous 50.3, while the employment indicator fell to 47.3 from 49.7, its lowest reading since January 2021.
"The Italian services sector is now firmly in the grip of a recessionary threat," said Tariq Kamal Chaudhry, an economist at HCOB. "Companies do not seem to harbour belief in a swift recovery of the Italian services sector. New orders both domestically and abroad are now dwindling."
The PMI for Italy's smaller manufacturing sector, released on Friday, contracted in August for a fifth consecutive month.
The composite Purchasing Managers' Index combining services and manufacturing stood at 48.2 in August, down from 48.9 in July, Tuesday's survey showed.
Data released on Friday showed Italy's GDP shrank by a worse-than-previously anticipated 0.4% in the second quarter from the first. Rome is forecasting full-year 2023 growth of 1.0%, slowing sharply from the buoyant 3.7% rate in 2022.
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Written By: Reuters
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