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Italian service sector activity shrinks again in September - PMI

·1-min read
Outbreak of the coronavirus disease (COVID-19) in Venice

Italian service sector activity shrinks again in September - PMI

Outbreak of the coronavirus disease (COVID-19) in Venice

ROME (Reuters) - Italy's services sector remained in contraction territory for a second month running in September, with no sign of recovery in the new business index, a survey showed on Monday.

The IHS Markit Business Activity Index for services came in at 48.8 last month from 47.1 in August, staying below the 50 mark that separates growth from contraction.

The median forecast in a Reuters' survey of 14 analysts had pointed to a reading of 46.7.

The sub-index for new business in the sector held steady at 48.4 -- its seventh month running below the 50 threshold.

The service sector index collapsed to a record low of 10.8 in April, reflecting the severe impact of the coronavirus lockdown, but it rose over the following four months before slipping in August.

Italy's economy shrank 12.8% in the second quarter from the previous three months, following a 5.5% contraction in the first quarter. The government hopes a strong rebound in the second half of the year will repair some of the damage.

Underscoring those hopes, IHS Markit's sister survey for manufacturing, released on Thursday, showed activity increasing for a third month running in September.

Boosted by this strong reading, the composite Purchasing Managers' Index (PMI) for services and manufacturing rose to 50.4 in September from 49.5 in August.

(Reporting by Crispian Balmer; Editing by Toby Chopra)