Service sector growth in Italy accelerates to three-month high
Staff Writer |
Italy’s service sector enjoyed a rebound in growth during November, with both activity and new work expanding at the fastest rates since August.
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With capacity coming under pressure, companies took on extra staff for a fourteenth successive month.
Competitive pricing also helped to support sales as evidenced by another reduction in output charges.
With operating costs continuing to rise, latest data implied a further erosion of margins.
The headline seasonally adjusted IHS Markit 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 – picked up in November to a three-month high of 54.7.
That compared to October’s 52.1 and the index has now recorded above the 50.0 no-change mark for 18 months in succession.
Underpinning the latest rise in activity was a similarsized gain in new business.
Growth was also the best recorded for three months amid reports of firmer demand for services.
There was also some suggestion that competitive pricing plans had helped to support sales.
Latest data showed that average prices charged were reduced in November to the greatest extent since October 2016.
However, margins came under some pressure over the month as average operating costs increased again.
The rate of inflation also picked up since October, though remained weaker than the survey average.
IHS Markit Italy Services PMI 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 35 40 45 50 55 60 65 IHS Markit Business Activity, 50=no change GDP Business Activity -6 -4 -2 0 2 4 6 GDP, annual % change Sources: IHS Markit, ISTAT There were reports that prices for food and fuel had risen, whilst a number of respondents commented on an increase in staffing costs.
November’s survey indicated that employment levels continued to increase.
Recruitment was reported to reflect rising workloads at units, with the latest increase in employment solid and stronger than seen in October.
Nonetheless, there were a number of reports from panellists that units were lacking suitable and qualified staff.
Combined with rising levels of new orders, this led to a further modest increase in backlogs of work at Italian service providers during November.
Finally, business confidence remained inside positive territory with nearly 44% of panellists signalling positive projections for growth in the coming 12 months.
Increased investment, the planned launch of new services and hopes that the recent positive trend in sales will be maintained were all noted as reasons to be optimistic. ■