Spain: Composite PMI bounces back to a seven-month high in January
February 5, 2019
Reflecting stronger activity growth in the services and manufacturing sectors, the IHS Markit composite Purchasing Managers’ Index (PMI) increased from 53.4 in December to 54.5 in January, a seven-month high. As a result, the index climbed further above the 50-point threshold, indicating healthy expansion in business activity.
The IHS Markit services PMI climbed from 54.0 in December to a seven-month high of 54.7 in January. Business activity picked up despite the slowest expansion in new business in over two years in January. Notably, new business from abroad declined for the sixth consecutive month. That said, in line with rising demand, staff recruitment by companies accelerated to the fastest rate since July last year. On the price front, operating costs rose markedly, partly due to higher labor costs, which prompted service providers to raise their selling prices accordingly. Lastly, business confidence strengthened for the fourth successive month in January, thanks to a more upbeat outlook for activity in the year ahead.
Similarly, the IHS Markit Manufacturing PMI rose from December’s over two-year low of 51.1 to 52.4 in January, indicating a stronger improvement in operating conditions. Faster expansions in output, new orders and employment were largely behind January’s increase. Notably, both demand at home and from abroad strengthened in the surveyed month. Although the pace of job creation among firms was modest, it was the fastest since August. Regarding prices, input cost inflation continued to moderate In January, while output charges barely increased. Finally, business confidence hit a six-month high amid an improved outlook over greater demand ahead.
Author: Javier Colato, Economist