Italy: Service sector gains momentum in February, PMI survey shows

Rome: Italy’s services sector grew for a second month running in February and at its fastest rate since June last year, a survey showed on Tuesday, supported by a rise in new business in the euro zone’s third largest economy.

The HCOB Purchasing Managers’ Index (PMI) for Italian services came in at 52.2 in February, up from 51.2 in January, moving further above the 50 level that separates growth from contraction.

The result was broadly in line with the median forecast of 52.3 in a poll.

“The Italian services sector is standing firm on solid ground,” HCOB analyst Tariq Kamal Chaudhry said.

The survey’s new business sub-index climbed in February to 53.3 from 52.5 in January, while the employment index rose to 52.8 from 51.2.

Italy’s smaller manufacturing sector, by contrast, is going through a prolonged slump. The manufacturing PMI, released on Friday last week, showed activity contracting for an eleventh straight month, at roughly the same pace as in January.

The composite Purchasing Managers’ Index, combining services and manufacturing, stood at 51.1 in February from 50.7 in January, above the key 50 threshold for the second month in a row.

Italian gross domestic product grew by 0.9% last year, slightly more than the government’s most recent forecast, data showed last week. The Treasury is targeting 1.2% growth in 2024, but most analysts expect a rate of around 0.7%.