Italian services PMI falls to 48.8 as input costs surge
Italy's service sector contracted in March as costs surged. The PMI fell to 48.8 while the government prepared to lower its 2026 economic growth forecast.
The service sector in Italy contracted in March for the first time in 16 months, as a combination of waning demand and escalating costs weighed on activity. According to the latest survey data from S&P GLOBAL INC, the Services PMI Business Activity Index dropped to 48.8 last month from 52.3 in February. This reading marks the first instance since November 2024 that the index has fallen below the 50.0 threshold, which separates growth from contraction.
The downturn was driven by a significant softening in both domestic and international demand. The subindex for new business dropped to 48.3 from 52.7, while the indicator for new export business also slipped to 48.3, down from 50.4. Simultaneously, businesses faced mounting pressure from rising input costs, which surged to 64.6—the highest level recorded in over three years—fueled by higher prices for raw materials, energy, and fuel linked to ongoing geopolitical tensions.
