Italy Private Sector Activity Shrinks in March

The S&P Global Italy Composite PMI fell to 49.2 in March 2026 from 52.1 in February, pointing to the first contraction in private sector activity since January 2025 and the biggest since November 2024. The decline was led by a renewed fall in services activity and amid a softer expansion in manufacturing output. As similar trend was true for new orders, which likewise recorded a fresh contraction in March. Meanwhile, private sector employment growth largely stalled, and backlogs were stable. With regards to prices, inflation of input costs and output charges accelerated to 40- and 37- month highs, respectively.

The HCOB Italy Composite PMI increased to 52.1 in February 2026 from 51.4 in January, pointing to the strongest growth in private sector activity in three months. The manufacturing sector returned to expansion for the first time in three months (50.6 vs 48.1) while services growth slowed (52.3 vs 52.9). There was a moderate rise in new business, which was broad-based and although companies had sufficient capacity to work through backlogs, the rate of depletion was the weakest since July last year. Meanwhile, the rate at which jobs were added across the private sector was the strongest in eight months. Hiring activity was stronger in the service sector than it was in its manufacturing counterpart. On the price front, building cost pressures across both broad sectors pushed the composite reading to the second-highest in almost a year (softer than only November 2025). There was a similar trend of intensification in charge inflation, where the rate of increase hit a seven-month high.

The HCOB Italy Composite PMI rose to 51.4 in January 2026 from 50.3 in December, signaling regained momentum but still only a modest expansion in the private sector. Growth was led by the services sector, which recorded a stronger rise in activity, while the decline in manufacturing output eased. At the composite level, new orders increased at the slowest pace in six months, as demand in the services sector moderated and manufacturing sales continued to fall. Private sector employment edged higher, with both services and manufacturing adding staff, while outstanding work declined at a slower rate than in previous months. On prices, input costs rose, particularly for manufacturers, driving overall price pressures higher, and service providers raised charges at the fastest pace in six months. Looking ahead, sentiment softened, with service sector firms expressing more cautious expectations for growth in the months ahead.