Italy's services sector expanded at its fastest pace in 3.5 years in August, according to the latest S&P Global Italy Services Purchasing Managers' Index (PMI), released on September 3, 2026.
The seasonally adjusted Services Business Activity Index rose to 55.2 from 52.5 in July, marking the highest reading since April 2023. A reading above 50 indicates expansion, with the latest figure signaling robust growth in the sector.
New business growth accelerated to its steepest rate in nearly 2.5 years, supported by domestic demand through new customer acquisitions, improved sales performance, and the initiation of new projects. Export sales also increased at the fastest pace since October 2025, though international demand remained modest relative to domestic orders.
Employment in the services sector expanded for a third consecutive month in August, with job creation among the strongest in over a year. However, the pace of hiring slowed from July, and new hires were predominantly on temporary contracts. Service providers continued to reduce their backlog of outstanding work for the fifth straight month.
Input costs rose rapidly in August, with inflation remaining above historical trends. The increase was primarily driven by higher energy, fuel, and commodity prices, as well as elevated business service costs. Despite these pressures, service providers raised their own prices at a slower rate, with charge inflation falling to an eight-month low.
Business confidence for the year ahead declined to its lowest level since May, reflecting concerns over the external environment. Optimism was supported by expectations of new customer wins, planned increases in investment spending, and hopes for more stable geopolitical conditions.
The composite PMI output index, which combines manufacturing and services activity, rose to 53.6 in August from 52.5 in July. This marked the second-highest reading in over three years, with services growth offsetting a decline in manufacturing output.
