Italy March services PMI 52.0 vs 52.5 expected

• Services PMI 52.0 vs. 52.5 expected
• Prior 53.0
• Composite PMI 50.5 vs. 51.9 prior.

Key findings:

• Business confidence dips amid softer inflows of new work
• Export conditions near stabilisation
• Operating expenses rise at sharpest rate for 11 months

Comment:

Commenting on the final PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:

“In March, Italy’s private sector economy exhibited signs of softening, as evidenced by the HCOB Composite Output Index,
which hovered just above the critical growth threshold of 50. The economy continues to be buoyed by the services sector,
while manufacturing remains in crisis state. Within the services sector, activity continued to expand compared to the
previous month, albeit at a slightly decelerated pace.

“Service providers attributed the increase in output to a rise in incoming
business, driven by recent client acquisitions. Overall, activity and demand in services appear to be aligning with long-term
average trends, just new export business continued to decline as key market economic conditions remain weak.
Nevertheless, the decline in international sales was the softest of an eight-month period.

“Services price inflation remains sticky. The ECB is closely watching the current developments with respect to service
inflation, and the latest data coming from Italy will not be in their favour. Input prices in the services sector have accelerated
for the fifth consecutive month, driven by a combination of rising wages, energy costs, and raw material prices. In response
to these underlying price pressures, companies have managed to increase their charges, effectively passing on costs to
clients.

“Looking ahead, a greater proportion of service providers anticipate growth in the coming year compared to those that
forecast a fall. However, overall confidence levels have notably declined in March, reflecting concerns about future economic
developments. This apprehension is likely due to the ongoing uncertainty surrounding US tariffs. Despite the weaker outlook
and in an effort to keep on top of outstanding business, service providers continue to seek new staff, as the increase in
workloads was sustained.”

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