Italy business sentiment improves in June but consumer morale slips

ROME (Reuters) -Italian businesses sentiment improved for a second month running in June but consumer morale fell back slightly, data showed on Friday, in mixed signs for the prospects of the euro zone's third largest economy.

National statistics institute ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, rose to 93.9 this month from 93.1 in May, posting the highest reading since February.

The sub-index for manufacturing posted its highest level since July last year, offering hope that the sector may be emerging from a long slump.

Construction and services also picked up, offsetting a decline in retail sector sentiment.

Consumer confidence, however, declined in June to 96.1 from 96.5 the previous month, ISTAT said, below a median forecast of 97.0 in a Reuters' poll of analysts.

The Italian economy grew by 0.3% in the first quarter from the previous three months, a slightly stronger reading than expected after the government in April halved its 2025 growth estimate to 0.6% amid mounting uncertainty due to U.S. trade tariff policy.

Italy posted growth of 0.7% in each of the last two years.

(Reporting by Gavin Jones, graphic by Stefano Bernabei)