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Italy services sector shrinks in Oct for third month running -PMI

ROME, Nov 4 (Reuters) - Italy’s services sector contracted for a third month running in October and at a steeper rate than the month before, a survey showed, as a resurgence of the coronavirus triggered government restrictions on activities from restaurants to gyms.

The IHS Markit Business Activity Index for services fell to 46.7 from 48.8 in September, slipping further below the 50 mark that separates growth from contraction.

The median forecast in a Reuters survey of 16 analysts had pointed to a reading of 47.0.

The sub-index for new business in the sector dropped from 48.4 to 45.1 -- the lowest reading since June and the eighth consecutive month below the 50 threshold.

The service sector index collapsed to a record low of 10.8 in April, at the height of a nationwide lockdown during Italy’s first wave of COVID-19 infections. It rose over the following three months before resuming a downward trend in August.

Italy’s economy grew by some 16% in the third quarter from the previous three months, data showed last week, but the recovery looks likely to peter out in the fourth quarter as the government imposes progressively tighter curbs on business.

Factories still remain open, however, and IHS Markit’s sister survey for manufacturing, released on Monday, showed activity increasing in October for a fourth month running.

The composite Purchasing Managers’ Index (PMI) for services and manufacturing slipped below the key 50 level in October, falling to 49.2 from 50.4 the month before. (Reporting By Gavin Jones; Editing by Catherine Evans)

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