- Previously 49.8
- Overall PMI 50.7
- Previously 48.6
Italy’s economy returned to growth slightly in January due to improvements in the services sector. Production and sales both rose for the first time in six months, but price pressures have intensified, giving the ECB its first tailwind of the year. HCOB points out:
“Finally, there is some good news from Italian service providers. The corresponding HCOB PMI returned to growth territory in January for the first time in six months, reaching 51.2 index points. Weakness in global demand Despite high prices, the sector remains strong, and the HCOB Nowcast, which takes into account the PMI index, forecasts service sector growth of 0.2% in the first quarter.
“In Italy’s service sector, employment has increased for three consecutive months. We therefore expect the unemployment rate, which was 7.5% in November 2023, to remain at historic lows in the coming months. The decline in the backlog was suppressed by an increase in new business, supported by a return to growth.
“The development of input prices is probably a problem for Italian service providers. Prices have increased compared to the previous month and are above the long-term average. According to participants in the HCOB Services PMI survey, the recent increase This is due to increases in fuel, utility costs and power companies.Companies will not be able to raise production prices to the same extent, meaning profit margins are likely to fall.
“Looking ahead, the situation for the sector is mixed. The new business index has risen significantly compared to the previous month and is now in growth territory. “There is a lot of economic uncertainty. Still, optimism is at the highest it’s been in almost a year.”