FX.co ★ Italy Services Activity Growth Slows

The HCOB Italy Services PMI declined to 52.1 in June 2025, down from May’s nearly one-year peak of 53.2, falling short of market expectations of 52.7. This still indicates expansion for the seventh consecutive month, though it's the slowest pace since March. Output and new orders continued their above-average growth, fueled by new service introductions and client acquisitions, but the momentum has slowed. Export sales experienced their steepest decline in five months, reflecting decreased demand from key European markets and escalating global trade tensions. Input cost pressures intensified due to rising wages and increasing energy and raw material costs. Despite these challenges, businesses exercised caution in transferring costs to customers, as reflected by only modest increases in selling prices. On a positive note, employment increased for the fifth month, with job creation reaching its fastest rate in a year, contributing to a further reduction in backlogs. Looking ahead, companies remain optimistic about the next year, encouraged by new client relationships and expectations for more stable market conditions.