Italy: Italian service sector sees softening growth in April
The HCOB Italy Services Purchasing Managers’ Index (PMI) fell to 54.3 in April from 54.6 in March. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in services sector business activity compared to the previous month.
April’s PMI reading was influenced by a mix of factors, including a deceleration in the pace of new business and activity growth, amid increasing price pressures leading to softer demand conditions. However, the sector saw a strengthening in foreign client demand, particularly across European markets. Service providers responded to these conditions by increasing their staffing levels, the rate of job creation hitting its quickest in nearly a year.
Inflationary pressures in the Italian service sector intensified in April, with input price inflation reaching its highest in a year due to increased staff and fuel costs. This trend of rising operating expenses has been nearly four years long, prompting service providers to raise their charges. Despite these cost pressures, business sentiment remained positive, albeit below historic trend levels, with firms’ confidence in the 12-month outlook unchanged from March, driven by expectations of new projects, demand improvements, and new client wins.