Italy PMI: Lockdown Setback For Services

The Italian services sector unexpectedly contracted in April, with the PMI reading falling to 47.3 (50.0 exp., 48.6 prior), and dragging down the composite figure (51.2, vs 53.0 exp., 51.9 prior) amid Italian COVID lockdown measures. The IHS Markit release reports that business activity, new orders, exports, and employment all declined.

• Activity: April saw the 9th consecutive monthly contraction in services output, and the sharpest drop in 3 months, with new orders falling and exports subdued.
• Backlogs: Outstanding business "rose very slightly" after 13 consecutive contractions, as pandemic restrictions and business closures "weighed on firms' ability to complete incoming new work".
• Employment: The fall in the employment reading was the biggest in 3 months, "with firms often mentioning voluntary resignations and retirements".
• Prices: Input costs rose again (fuel/raw materials inflation noted), though the rate was softest since Jan, and below long-run averages. Output charges "fell marginally as respondents noted efforts to encourage sales prompted discounting strategies".
• Outlook: Services firms remained "widely optimistic" for the year ahead, citing "the passing of COVID-19 and positive vaccination efforts".