Spain: Composite PMI rises in November amid highest price pressures on record
The IHS Markit composite Purchasing Managers’ Index (PMI) rose from 56.2 in October to 58.3 in November, reflecting stronger growth in the services sector more than offsetting a somewhat softer expansion in manufacturing activity. Therefore, the index moved further above the 50-threshold, signaling another significant increase in business activity over the previous month.
The IHS Markit Services PMI climbed to 59.8 in November from 56.6 in October, signaling accelerated expansions in production and employment. Moreover, new business rose at a sharper pace sustained by strong domestic and improving but still-subdued external demand. However, supply constraints translated into a further increase in workloads. On the inflation front, input cost inflation reached the highest level on record, amid higher prices for energy, materials, transportation and freights as well as due to rising wage pressures. Therefore, companies hiked output prices at the fastest pace since data collection started in August 1999. Lastly, confidence remained elevated but declined due to mounting concerns over operating costs and the spread of Omicron variant.
Meanwhile, the IHS Markit Manufacturing PMI dipped to 57.1 in November from 57.1 in October. A slower increase in output amid persistent supply chain disruptions was behind November’s cooling, which nevertheless continued to benefit from strong demand. That said, supply constraints and transportation difficulties translated into a record rise in both prices and delivery times as well as into surging backlogs of work. On top of this, confidence about the future falling to a 13-month low.
Commenting on the Manufacturing PMI, Paul Smith, economics director at IHS Markit, said:
“The well-known supply-side issues in the global economy continued to curtail growth of the Spanish manufacturing sector during November, with severe constraints in the delivery of inputs leaving firms struggling to expand production in line with another month of robust new order gains”.
Meanwhile, commenting on the Services PMI, Smith stated:
“With concerns rising over new emerging lockdowns and restrictions due to COVID also reported, there is a feeling that the sector’s current rate of expansion will be hard to sustain in the coming months”.