FX.co ★ Italian Private Sector Activity Growth at 3-Month Low

In June 2025, Italy's HCOB Composite PMI decreased to 51.1 from 52.5 in May, indicating the slowest rate of expansion since March. This deceleration was influenced by a reduction in service sector growth, with the PMI at 52.1, and a renewed contraction in manufacturing, for which the PMI stood at 48.4. New business inflows showed signs of weakening, with the growth of new orders concentrated exclusively in the service sector. Nevertheless, private sector employment increased at the highest rate observed in a year, despite ongoing job cuts in the manufacturing sector. Indicators of spare capacity remained evident, as work backlogs declined at a slightly quicker rate than in the previous month. Across the private sector, input costs rose, although the inflation of output charges dropped to its lowest point in 2025. Price increases were restricted to the service sectors, while manufacturers experienced reductions in both costs and selling prices. Business confidence concerning future activity remained largely stable compared to May, signifying cautious optimism amidst the varied trends across sectors.