- Prior 53.0
- Composite PMI 50.1
- Prior 54.7
Italian services activity contracted to start the new year amid fresh COVID-19 restrictions related to the omicron variant. Overall business activity also grinded to a halt as new business declines for the first time since April last year while business confidence falls to a 12-month low. Elsewhere, inflation pressures remain severe even though cost pressures have eased a little since the November peak. Markit notes that:
"Italy's service sector saw a rocky start to 2022 as fresh restrictions to curb the Omicron variant weighed on the performance of the sector. Output declined for the first time since last April amid a reduction in new work, with foreign demand contracting at a particularly steep pace.
"Some good news came with regards to prices, as the rate of cost inflation retreated further from November's survey high. Although still severe, this provides a tentative sign that inflationary pressures may have peaked, with firms raising their own charges at a slower rate as a result.
"Falling services output, combined with a weaker upturn in manufacturing production led to a broad stalling of private sector growth at the start of the year, while inflows of new work rose at a sharply reduced pace.
"As a result, firms recorded weaker expectations towards output over the next year. Although still upbeat, the level of sentiment was the weakest since December 2020, with private sector companies concerned that fresh restrictions combined with still severe inflationary pressures may further hinder demand, and subsequently growth, in the coming months."
