Company News

Italian service sector activity shrinks in Aug - PMI

ROME, Sept 3 (Reuters) - Italy’s services sector fell back into contraction territory in August after a brief burst of activity in July, with new business, especially from abroad, slowing, a survey showed on Thursday.

The IHS Markit Business Activity Index for services dropped to 47.1 from 51.6 in July, slipping once again beneath the 50 mark that separates growth from contraction.

The median forecast in a Reuters’ survey of 14 analysts had pointed to a reading of 49.2.

The sub-index for new business in the sector dropped to 48.4 from a previous 49.8.

The service sector index collapsed to a record low of 10.8 in April, reflecting the severe impact of the coronavirus lockdown, but rose over the following four months before slipping in August.

National statistics bureau ISTAT reported this week that the economy shrank 12.8% in the second quarter from the previous three months, following a 5.5% contraction in the first quarter. The government hopes a strong rebound in the second half of the year will repair some of the damage.

Underscoring those hopes, IHS Markit’s sister survey for manufacturing, released on Tuesday, showed activity increasing for a second month running in August and at its fastest rate for more than two years.

However, the composite Purchasing Managers’ Index (PMI) for services and manufacturing eased to 49.5 in August from 52.5 in July, signalling a renewed fall in private sector output. (Reporting by Crispian Balmer; Editing by Hugh Lawson)