Key facts
- Italy's service sector PMI rose to 52.5 in July from 50.2 in June.
- Input cost inflation in Italy's services sector decreased for the second consecutive month.
- New business in Italy's services sector reached its highest level this year.
- Employment in Italy's services sector saw an increase.
- Germany's service sector PMI rose to 49.8 in July from 48.6 in June, indicating a marginal contraction.
- Germany's composite output index returned to growth for the first time since March, rising to 51.3.
Italy's service sector experienced a strengthened expansion in July, with its Purchasing Managers' Index (PMI) climbing to 52.5 from 50.2 in June, surpassing analyst expectations and indicating a further move above the 50-point threshold separating growth from contraction. This marks an encouraging development for the euro zone's third-largest economy.
Input cost inflation in Italy's services sector eased for the second consecutive month, falling to 61.2 from 62.1. The employment sub-index rose to 52.7 from 50.4, and the new business indicator climbed to 53.9 from 51.0, reaching its highest reading this year. The Italian economy has shown resilience, with GDP growth of 0.3% in Q1 and 0.2% in Q2.
Meanwhile, Germany's service sector saw its downturn ease in July, with the final HCOB Germany services PMI rising to 49.8 from 48.6, indicating a marginal contraction. Demand picked up slightly, with new business rising for the first time in five months. The composite output index for Germany also returned to growth for the first time since March, reaching 51.3, driven by a marked rise in manufacturing production.