- Services PMI 50.5 vs. 51.0 expected and 51.4 prior.
- Composite PMI 49.7 vs. 50.8 prior.
Key findings:
- Services activity rises marginally and at slowest pace seen in 2024 so far.
- New business volumes down for second month in a row.
- Jobs growth sustained.
Comment:
Commenting on the final PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:
“Stagnation in September. The latest HCOB Composite PMI for Italy’s private sector economy signals an adverse development at the end of the third quarter, with an index value dipping into contraction territory for the first time of the year, down to 49.7. This trend seems to be in line with recent developments in struggling peers Germany and France.
Both manufacturing and services contributed to the slide in the PMI, with manufacturing declining at a faster rate on the month and services expanding only marginally. New business opportunities, both at the total and international levels, are struggling to gain momentum in Italy's service sector. For the second consecutive month, there has been a decline in new business, with panellists noting subdued sales conditions.
However, activity remains slightly positive, and in this context, firms continued to make modest efforts to increase their staffing levels. With outstanding business declining for a year and new business under growing pressure, it's uncertain how long firms can maintain their current hiring practices. Cost push inflation seems to remain a problem for Italy’s service providers. Firms are mentioning wages and energy as main drivers, but they struggle passing these costs on to customers, as output prices only increased marginally.
Italy’s service providers seem more optimistic about the future. After confidence deteriorated sharply over the last two months, September survey data regarding the near-term outlook showed an uptick. These hopes are tied to expectations of an improving economic environment and attracting new customers.”
