Spain: Composite PMI climbs to 10-month high in March
April 3, 2019
Reflecting stronger activity growth in both the services and manufacturing sectors, the IHS Markit composite Purchasing Managers’ Index (PMI) rose from 53.5 in February to 55.4 in March, a 10-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 increased from 54.5 in February to an over-year high of 56.8 in March. New business rose strongly in the surveyed month thanks mainly to improved demand conditions, particularly at home. This led companies to take on additional staff, which also contributed to a reduction of backlogs of work—the first in 11 months. On the price front, input costs rose notably, partly due to the recent minimum wage hike, which led service providers to increase output charges in March. Lastly, business confidence strengthened compared to February, reaching its highest level since June 2018.
Similarly, the IHS Markit Manufacturing PMI returned to positive territory in March, climbing to 50.9 from 49.9 in February. March’s upturn largely reflected slight improvements in output, new orders and employment. Production and new export orders rose despite more challenging external demand conditions, while firms continued to create jobs in the surveyed month. Regarding prices, input costs rose marginally which, combined with relatively subdued demand, output charges were lifted only slightly in March. Finally, business confidence remained largely upbeat amid positive expectations regarding sales and new product launches.
Author: Javier Colato, Economist