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Investing.com -- Italy’s services sector expanded at a faster pace in September, with new orders growing at the highest rate in 17 months, according to survey data released Friday.
The HCOB Italy Services PMI Business Activity Index rose to 52.5 in September from 51.5 in August, marking the tenth consecutive month above the 50.0 threshold that separates growth from contraction.
The acceleration in service sector activity was primarily driven by a solid expansion in new orders, which increased at the fastest pace since April 2024. Respondents attributed this growth to improving customer demand and greater interest in their products.
Employment in the services sector continued to rise for the eighth consecutive month, although the pace of job creation eased to the softest level since April. Despite the slower hiring rate, companies were able to reduce their backlogs of work for the seventh month in a row.
Input costs remained elevated in September, with firms citing rising salaries—often linked to collective agreements—along with higher commodity, energy, and rent costs. However, the rate of input cost inflation eased slightly from August.
Output prices continued to increase, extending the sequence of monthly rises to four years, though the pace of inflation slowed to the weakest level since November 2024.
Business confidence improved slightly in September, with companies expressing optimism about continued growth in new orders and plans to expand service offerings. Some firms anticipated a boost from the upcoming 2026 Winter Olympics in Milano Cortina.
The HCOB Italy Composite PMI Output Index, which measures activity across both manufacturing and services sectors, remained unchanged at 51.7 in September, indicating continued modest growth in overall private sector activity.
However, the stable headline figure masked diverging trends between sectors. While services activity expanded solidly, manufacturing production contracted following a modest rise in August, highlighting an increasing imbalance in Italy’s economic recovery.
New export orders continued to decline for the fourteenth consecutive month, with companies citing muted demand in Europe and geopolitical issues as factors behind the decrease.
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