Italy's service sector continued to contract in July on falling new business, survey data from Markit Economics showed Friday.
The Markit/ADACI Purchasing Managers' Index fell unexpectedly to 43 in July from 43.1 in June. The expected reading for July was 43.5.
Incoming new business fell at the fastest pace since March 2009. Activity and employment both dropped as a result. Another negative development for businesses was a slight rise in input price inflation from June's seven-month low.
"July PMI data pointed to recession in Italy's service sector deepening at the start of the third quarter," Phil Smith, economist at Markit said.
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