ROME (Reuters) - Italy's manufacturing sector contracted in July for the first time in more than two years, a survey showed on Monday, amid a sharp decline in factory production.

The S&P Global Purchasing Managers' Index (PMI) for Italian manufacturing came in at 48.5, down from 50.9 the month before and below the 50 mark that separates growth from contraction for the first time since June 2020.

The index fell for a fifth consecutive month as manufacturing in the euro zone's third largest economy has been hit by uncertainty linked to the war in Ukraine and expectations of a deteriorating economic picture.

The July index reading was worse than expected, with a Reuters survey of six analysts providing a median forecast of 49.3.

The new orders sub-index dropped to 42.5 from 43.9, well below the key 50 threshold and posting an eighth straight decline.

The knock-on effect of the Ukraine conflict has hit the economic prospects in countries throughout the euro zone, however Italy has so far fared better than some of its main trading partners.

On Friday, statistics bureau ISTAT said Italy's economy grew a faster-than-expected 1.0% in the second quarter of 2022 and 4.6% year-on-year.

(Reporting by Angelo Amante, editing by Crispian Balmer and Toby Chopra)