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Italy's service sector continued to shrink in June but the pace of downturn eased markedly as restrictions to combat the coronavirus disease pandemic were loosened, survey data from IHS Markit showed Friday.

The services Purchasing Managers' Index advanced sharply to 46.4 in June from 28.9 in May. The score signaled a fourth consecutive reduction in service sector activity. Economists had forecast a reading of 47.0.

Incoming new business dropped further, with the reduction remaining sharp despite easing.

Amid muted demand conditions, service providers reduced staff numbers markedly. Encouragingly, activity expectations improved, but the level of positive sentiment remained subdued in the context of historical data.

The composite output index logged a reading of 47.6 in June versus 33.9 in May. At the sector level, services remained the primary drag on output, as manufacturers recorded a return to marginal growth.

With weak demand conditions domestically and around the world, any meaningful recovery from the brutal economic blow dealt by the pandemic is likely to remain slow, Lewis Cooper, an economist at IHS Markit said.



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