Italy Services Activity Growth Eases to 7-Month Low

The HCOB Italy Services PMI fell to 51.5 in August 2025 from 52.3 in July, in line with forecasts and marking the lowest reading since January. The slowdown came despite a solid increase in new orders, which grew at its fastest pace in six months, attributed to new client wins and improved domestic demand. However, the divergence between domestic and foreign sales persisted, as export orders dropped for the thirteenth consecutive month, albeit at a softer pace. Employment growth also slowed, though backlogs of work decreased for the sixth month in a row, suggesting that current staffing levels may be sufficient to meet demand. Moreover, cost pressures intensified, with firms reporting higher expenses for fuel, energy, rent, and other business inputs. Meanwhile, output prices rose at the weakest rate in nine months. Finally, business confidence for the next 12 months remained positive but fell to one of the lowest levels recorded in over four-and-a-half years.