Italy Services PMI Contracts Again, Slightly Misses Expectations

Italian Services PMI missed expectations in March, remaining in contractionary territory at 48.6, vs 48.8 in Feb and and 49.0 expected by the Bloomberg consensus.

• This was the 8th consecutive monthly sub-50.0 reading. The IHS Markit report explains the worsening contraction came "amid a renewed dip in new work. As a result, firms continued to trim their workforce numbers during March, with the rate of job shedding quickening on the month."
• Demand relapsed from the previous month: "Following a slight upturn in February, new business declined marginally amid reports of weak demand conditions due to COVID-19 restrictions. New orders from abroad also decreased in March, extending the current sequence of contraction to 21 months, although the rate of decline was the slowest since August 2019."
• That said, there was some positive news on the confidence front, with service sector sentiment the strongest since September 2010 on COVID vaccine rollout and anticipated economic recovery.
• Also notable is input price pressures, which eased in the month but remained "solid". That said, "service providers continued to offer discounts as part of efforts to attract sales during March. Average charges fell for the twentieth month in a row and moderately overall."