Italy's Services Sector Posts Strongest Growth in Nearly a Year – PMI

Italy's service sector expanded for the sixth consecutive month in May, achieving its fastest growth rate in nearly a year, according to a new survey — offering encouraging signs for the euro zone’s third-largest economy.

The HCOB Services Purchasing Managers’ Index (PMI) rose to 53.2 in May, up from 52.9 in April and exceeding analyst expectations. A Reuters poll of 11 economists had forecast a more modest reading of 52.0. The result remained well above the 50.0 mark that separates growth from contraction.

Nils Müller, economist at Hamburg Commercial Bank, attributed the sector’s strength to "resilient domestic demand and a steady inflow of new business." The new business sub-index registered at 52.4, slightly down from April’s 52.7 but still in growth territory. Meanwhile, the services employment index rose to 52.2 from 51.2, indicating solid job creation.

“While the pace of new orders eased slightly, it remains strong by historical standards, suggesting the recovery is gaining traction,” Müller added.

In contrast, the manufacturing sector continues to face headwinds. HCOB’s related manufacturing survey, released earlier this week, showed a contraction for the 14th straight month, although signs of stabilisation are beginning to emerge.

The composite PMI, which blends both manufacturing and services performance, climbed to 52.5 in May from 52.1 in April — the highest level since April 2024.

Italy’s GDP rose 0.3% in the first quarter compared to the previous three months, according to national statistics agency ISTAT.

These modestly positive indicators come despite a downward revision in the government’s 2025 growth forecast. In April, Prime Minister Giorgia Meloni’s administration halved the full-year projection to 0.6%, citing growing uncertainty around U.S. trade policy.

Source: Reuters