ITALY DATA: May Services PMI: Strongest Since June 2024, Employment Rising

The Italian services PMI was stronger-than-expected at 53.2 (vs 52.0 cons, 52.9 prior), the highest level since June 2024. That brings the composite PMI to 52.5 (vs 51.4 cons, 52.1 prior), the highest since April 2024. Services employment continued to tick up on May, consistent with the record-low Italian unemployment level reported yesterday.

Key notes from the release:

• "Overall new work volumes continued to rise at a modest pace in May. The latest increase was the fourth in successive months and was a result of incoming new orders from both existing and new customers, panel member reports showed".
• "There were signs that the sustained growth in orders was held up by the domestic market as new export business declined further in May...Challenging global economic conditions reportedly weighed on demand for Italian services".
• "In line with greater new business, there was a similarly strong increase in service sector employment levels in May".
• "The level of confidence was the highest for three months in May, with nearly one-third (32%) of respondents forecasting a rise in activity over the year. The prospect of new client wins as well as plans to invest and expand business drove positive sentiment"
• "Input price inflation remained elevated, meanwhile, amid reports of increased energy prices and wage burdens"..."Service providers increased their selling prices at a sharper rate in response to greater cost pressures. The rate of charge inflation picked up to its strongest in just over a year".