By Gavin Jones
ROME, July 3 (Reuters) - Italian service sector activity contracted for the 19th month running in June and the rate of decline accelerated for the first time since February, data showed on Friday.
The Markit/ADACI Purchasing Managers' Index, spanning companies from hotels to insurance brokers, fell to 42.3 from 43.1 in May, suggesting an end to Italy's worst post-war recession is still some way off.
Activity has languished below the 50 mark that separates growth from contraction since November 2007 and the latest data was below the median forecast of 42.9 in a Reuters survey of analysts.
The PMI showed new business shrinking for the 20th straight month and at a steeper rate than the previous month, while the employment sub-index fell to 42.7 from 43.1 to post the fastest rate of job shedding since the survey began in January 1998.
The data "calls into question the resilience of the 'green shoots' that have been emerging from the economy in recent months," said Andrew Self, economist at Markit Economics.
"The fear of weak consumer spending dragging down activity seems to be turning into reality and, with employment in the sector falling at a fresh survey record pace, any possibility of a swift recovery appears to be off the cards."
The services PMI bucks the trend of recent indicators which have pointed to an economy still mired in the deep recession that began in spring of last year, but with some reason for optimism that the worst may be over.
Consumer and business confidence, as measured by the ISAE institute, both rose in June and the companion manufacturing PMI issued on Wednesday showed activity shrinking at its slowest rate for nine months.
Self said the only piece of positive news to emerge from the service sector data regarded business expectations, which hit a 28-month high.
Service firms cut their prices for the ninth month running in response to weak demand, albeit at the slowest rate since January.
The Organisation for Economic Cooperation and Development forecast last week that the euro zone's third largest economy would shrink by 5.5 percent this year, after last year's 1.0 percent contraction.
Italy has not posted two consecutive years of falling GDP in its post-war history.
REUTERS POLL: 42.9 (range 40.4-44.8, 10 forecasts) (Editing by Victoria Main)