Growth of service sector in Italy unchanged at solid rate during April
Staff Writer |
Growth of Italy’s service sector held steady during April, whilst new business rose at a stronger rate and jobs continued to be created.
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However, worries over growing competition and a slowdown in demand growth relative to earlier in the year meant optimism over the future weakened.
Meanwhile, on the price front, input costs rose to a stronger degree but charges continued to decline marginally.
The headline index from the report, the seasonally adjusted Business Activity Index – which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago – was unmoved at 52.6 in April.
Indicative of solid growth, the latest data meant that activity has now risen for 23 months in a row.
However, growth remains well down on those seen around the turn of the year.
New business continued to increase in April and provided the primary support to the rise in activity.
Companies reported success in converting growing interest in their services into hard business wins.
As with activity, growth in new work was lower when compared to earlier in 2018, but did nonetheless improve slightly on March’s low.
Operating capacity subsequently remained under pressure as evidenced by another increase in levels of work outstanding.
Backlogs have now risen for 19 months in a row, although April’s growth was again modest.
Nonetheless, firms remained suitably encouraged to add to their payroll numbers.
The latest survey showed that jobs growth was extended to over oneand-a-half years, with the latest net gain the best seen in 2018 so far.
Increased company investment was noted as a factor helping to drive recruitment during the latest survey period.
Firms found that increasing their payroll numbers also added to their wage bills during the month, with average employee costs reported to be higher.
Alongside increased prices paid for fuel and supplier services, overall operating costs continued to increase.
April’s survey also showed the fastest inflation for three months.
Efforts to pass on these costs to clients were broadly thwarted by competitive pressures.
Output charges were down marginally for a third month in a row as a result.
Finally, market competition was also cited as a concern regarding future company performance.
Whilst widely expecting demand and orders to rise further, optimism over future performance fell to a four-month low during April. ■