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Italy's service sector activity expanded at a marked pace in July, despite a slowdown in new business growth, survey data from IHS Markit showed Friday.
The services Purchasing Managers' Index dropped to 54.0 in July from 54.3 in June. However, any reading above 50 indicates expansion in the sector.
New orders grew at the slowest rate since October 2016. Panelists commented that growth had softened in spite of promotional activities and discounts being offered to clients.
Backlogs subsequently declined slightly, the first time that a fall has been registered for 22 months, with these efforts supported by increased capacity expansion through higher employment.
On the price front, input price inflation remained marked in July on higher fuel prices, while output prices fell further.
Finally, business confidence weakened to its lowest level since July 2016.
"Combined with the near stagnation of the manufacturing economy in July, which is straining in the face of a slowing external trade environment, the Italian economy looks set to expand only modestly at best in H2 2018," Paul Smith, Economics Director at IHS Markit, said.
