ROME (Reuters) - Italy's services sector grew in July for a seventh month running but at a slower pace than the month before as higher interest rates and the elevated cost of living weighed on the euro zone's third largest economy, a survey showed on Thursday.
The HCOB Purchasing Managers' Index (PMI) for Italian services came in at 51.5, down from 52.2 in June. It remained above the 50 level that separates growth from contraction, but marked a third consecutive monthly decline.
The result was lower than expected, with a Reuters survey of 16 analysts pointing to a figure of 52.2.
"In the face of a challenging economic landscape at the onset of the third quarter, the Italian service sector exhibits remarkable resilience," said Tariq Kamal Chaudhry, an economist at HCOB.
The new business indicator declined to 50.3 from a previous 52.9, while there was a drop in employment for the first time since April 2021 as the indicator came at 49.7 from 52.3 in June.
The PMI for Italy's smaller manufacturing sector, released on Tuesday, came in at 44.5, up from 43.8 in June.
The composite Purchasing Managers' Index combining services and manufacturing stood at 48.9 in July against 49.7 in June, the survey showed.
Italy's economy performed surprisingly poorly in the second quarter, national statistics bureau ISTAT said on Monday.
Gross domestic product (GDP) contracted by 0.3% on a quarterly basis between April and June and was up 0.6% year-on-year, making it harder for the government to reach its stated goal of 1% growth rate in 2023.