- Prior 51.5
- Composite PMI 51.7 vs 51.7 prior
Key findings:
- Sharper increases in business activity and new orders
- Rate of job creation softens
- Business confidence improves
Comment:
Commenting on the PMI data, Nils Müller, Junior Economist at Hamburg Commercial Bank, said:
“The latest HCOB PMI data paint a picture of divergence: while the services economy continues to expand, the manufacturing sector has slipped back into contraction. The composite PMI, which reflects the activities of both sectors in a single figure, signalled modest growth at the same pace as in the previous month. Yet this stability masks a growing imbalance between the sectors, raising questions about the sustainability of Italy’s private sector recovery.
“The services sector ended the third quarter on a strong note, with business activity rising at the fastest pace since May and new orders expanding at the quickest rate in nearly a year-and-a-half. Firms reported improving domestic demand, but export orders continued to decline amid muted European demand and geopolitical uncertainty. Employment rose for the eighth consecutive month, albeit at a slower pace, and backlogs of work were reduced further.
“Cost pressures remained elevated in September, with service providers citing rising wages – often linked to collective agreements – alongside higher energy, rent and commodity costs. Although the pace of output price inflation eased to the weakest level in ten months, charges continued to rise, extending the sequence of monthly increases to four years. Some companies reported offering discounts to support demand, suggesting that margin pressures are beginning to bite.
“Sentiment among service companies improved slightly, supported by expectations of further gains in new business and plans to expand service offerings. While confidence remains below the historical average, some firms anticipate a boost from major events such as the 2026 Winter Olympics in Milano Cortina. Overall, the outlook for the Italian economy hinges on whether services can maintain momentum in the face of persistent cost inflation and external headwinds, and whether manufacturing can stabilise to support a more balanced recovery.”
