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Markit/ADACI's services purchasing managers' index (PMI) for Italy dropped to 49.8 in May from 52.1 in April.
A reading above 50 indicates expansion in the sector.
The index was mainly driven by drops in output, new business and job creation, while input prices rose.
"The latest PMI data raise the likelihood of Italy's economic recovery slowing in the second quarter. Activity fell slightly across the vast service sector in May, which coincided with a slowdown in manufacturing output growth to a three-month low," an economist at Markit Phil Smith said.
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