ROME (Reuters) - Italy's services sector registered broadly stable activity in December, a survey showed on Wednesday, holding up better than expected as new business grew for the first time since June.
S&P Global (NYSE:SPGI)'s Purchasing Managers' Index (PMI) for Italian services climbed to 49.9 in December from 49.5 the month before, remaining just marginally below the 50 mark that separates growth from contraction.
The result was above a median forecast of 49.5 in a Reuters survey of nine analysts.
The new business sub-index for the sector returned to expansion after five consecutive sub-50 readings, coming in at 50.5 against 49.5 the month before.
"Notably, inflows of new business rose for the first time since June, amid reports of improved client demand, though gains came primarily from the domestic market as new export work declined sharply," said Lewis Cooper, economist at S&P Global Market Intelligence.
The PMI for Italy's smaller manufacturing sector, released on Monday, showed contraction for a sixth month running in December, at broadly the same rate as the month before.
The composite Purchasing Managers' Index combining services and manufacturing stood at 49.6 in December, up from 48.9 the month before but still pointing to contraction.
National statistics bureau ISTAT said last month Italy's economy would grow by 0.4% this year, slashing a 1.9% projection made in June and warning of several downside risks that could lead to an even sharper slowdown.
"Whilst the improvement in demand provided welcome news following a challenging fourth quarter of 2022 for the services sector, at this still weak level of growth - and combined with sustained weakness in manufacturing - the Italian economy is still clearly facing challenges as we enter 2023," S&P Global's economist Lewis Cooper said.