Italy's manufacturing sector contracted in August for a fifth consecutive month, albeit at a slower pace than in June and July, a survey showed on Friday, amid persistent declines in output and new orders in the euro zone's third largest economy.

The HCOB Global Purchasing Managers' Index (PMI) for Italian manufacturing came in at 45.4, up from 44.5 in July but still well below the 50 mark that separates growth from contraction.

The reading was below the median forecast of 46.0 in a Reuters survey of 10 analysts.

"The manufacturing recession, which started mid-last year continues to stretch out, extending most likely into the third quarter," said HCOB economist Tariq Kamal Chaudhry.

He added that weak demand "appears to be exerting influence on the hitherto resilient Italian labour market as well. For the first time since August 2020, manufacturers are trimming their workforce numbers."

The manufacturing output sub-index and the new orders indicator remained deep in sub-50 territory indicating contraction. The former rose to 43.8 from July's 41.7, while the latter edged up to 42.4 from 41.8.

The Italian government is forecasting economic growth of 1.0% this year, slowing compared with last year's buoyant rate of 3.7%. (Reporting By Gavin Jones; editing by John Stonestreet)