(Reuters) – Activity in Italy’s service sector grew at its fastest rate in eight months in February, boosted by gains in new business, while there were signs that cost pressures on firms were easing, a survey showed on Friday.
S&P Global’s Purchasing Managers’ Index (PMI) for Italian services climbed to 51.6 in February from 51.2 in January, its second straight month above the 50 mark that separates growth from contraction.
Companies were hopeful the upswing in activity and new business would be sustained over the coming months, S&P Global said, with confidence in the future strengthening in February to its highest level since April 2022.
“Another rise in service sector activity, and at an accelerated rate, adds to the growing view that Italy’s economy is, relatively speaking, successfully navigating its way through the winter and will avoid what looked only a few months ago like a certain recession,” said Paul Smith, economics director at S&P Global Market Intelligence.
A survey of Italy’s manufacturing sector on Wednesday showed factory activity also gathered speed in February.
After more than a year battling high inflation, services firms’ costs increased in February at the slowest rate in 16 months, although firms reported wages continued to be a key driver of rising costs.
Service businesses passed on a significant portion of their increased operating expenses to customers, S&P said.
“There is some residual caution in hiring decisions, especially at a time of rising wages: employment rose in February, but at the slowest pace for a year,” said Smith.
(Reporting by Toby Chopra; Editing by Susan Fenton)
