(MENAFN - AFP) Italy's service sector has returned to growth after more than two years, a survey showed on Thursday, a day after Prime Minister Enrico Letta defeated a challenge by Silvio Berlusconi.
The Purchasing Managers' Index compiled by Markit Economics rose to 52.7 points in September from 48.8 in August, rising above the 50-point mark which distinguishes contraction from growth for the first time since May 2011.
The index is regarded as a reliable leading indicator of the economic climate.
Markit said the latest data "marked the first increase in the level of business activity in Italy's services sector since May 2011," and that "the pace of growth was solid."
There had also been "a stark improvement in the level of optimism among services firms with regards to the year-ahead outlook for activity."
It said that "confidence surged to the strongest in more than two years."
Markit economist Phil Smith commented: "The data, alongside those for manufacturing, show Italian GDP (gross domestic product) at least stabilising in the third quarter and perhaps even rising slightly for the first time in more than two years.
"Political stability is key to this forward momentum being sustained into the later stages of the year and beyond."
The Italian government is forecasting that a gradual economic recovery will begin later this year, following two years of a recession that has pushed the unemployment rate to record highs.
Meanwhile however, the official Istat data agency also on Thursday revised down the growth figure for 2012, saying the economy contracted by 2.5 percent instead of a previous estimate of 2.4-percent shrinkage.
Letta won a parliamentary confidence vote in his government on Wednesday after Berlusconi backed down from his attempt to topple the cabinet in a major blow for the ageing billionaire tycoon.
Analysts warn, however, that the government will struggle to meet a public deficit target of 2.9 percent of gross domestic product (GDP) this year -- under the EU-mandated 3.0-percent threshold.