ITALY DATA: Output Charge Inflation Picks Up In Jan Services PMI

The Italian January services PMI was in line with consensus at 50.4 (vs 50.7 prior). With the manufacturing PMI only a little below consensus on Monday, the composite reading was steady at 49.7 (the third consecutive month in contractionary territory).

• As in Spain, there was evidence of Italian services firms passing on increases in input costs to output charges in January,

Key notes from the release:

• “While some panellists linked the rise in output to new clients, others were reportedly challenged by adverse economic conditions”.
• “A sustained drop in new business volumes, which fell for the third month in a row”… “firms noted a demand slowdown and raised customer uncertainty”.
• “Weighing down on total new orders was a solid drop international sales in January”
• “Services firms in Italy opted to lower their staffing numbers in January”.
• “Wages remained the main source of cost pressure in January” “….”Though there were also mentions of raised raw material prices and higher services fees”.
• “There was a pick-up in charge inflation to its strongest for nine months, as firms looked to pass raised cost burdens to clients”.