Italy July services PMI 51.7 vs. 52.9 expected

• Services PMI 51.7 vs. 52.9 expected and 53.7 prior.
• Composite PMI 50.3 vs. 51.3 prior.

Key findings:

• Activity and new business rise at slower rates.
• Business confidence weakest in 2024 so far.
• Cost inflation trends upwards, while charge inflation cools.

Comment:

Commenting on the final PMI data, Dr Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank, said:

“Services drives the Italian economy amid concerns of slowing growth. The service sector remains the main engine of the
Italian economy, yet recent indicators suggest potential headwinds. The headline HCOB Italy Services PMI stood at 51.7 in
July, marking a significant decline from the previous month. This represents the weakest activity growth since January 2024.”

“Prices remain elevated. Service providers continue to grapple with sharply rising input costs, which are outpacing output
price hikes. According to surveyed companies, this increase reflects higher labour, fuel, and material costs.”

“Stagnating orders worry service providers. Of particular concern is the trend of slowing order growth compared to previous
months this year, raising fears of a loss in growth momentum. The demand slowdown is more pronounced in international
business than in domestic markets.”

“Future outlook loses momentum. While employment growth remains robust, future output expectations have slipped
significantly below the historical average. Optimism is sustained by hopes for new customers and a stronger influx of new
business, as well as a more stable geopolitical environment. However, the escalating tensions in the Middle East will be
crucial to monitor, as market participants will assess its impact in the coming months.”

This article was written by Giuseppe Dellamotta at www.forexlive.com.