Spain: Composite PMI climbs to eight-month high at the end of 2019
January 6, 2020
Reflecting a softer contraction in manufacturing activity and faster growth of the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) rose from 51.9 in November to 52.7 in December, the highest reading since April. Thus, the index moved further above the 50-threshold, indicating healthy expansion in business activity.
The IHS Markit Manufacturing PMI inched down to 47.4 in December from 47.5 in November. Weakness in the manufacturing sector reflected the sharpest reduction in output in almost seven years, as well as a deterioration in new orders for eight successive months. In addition, manufacturers reduced their staffing levels at the sharpest pace in over six years, while backlogs of work continued to decline in December. On the price front, both input costs and output charges fell again in the month. Sentiment among goods producers, meanwhile, improved in December despite lingering concerns over government policies and the current demand environment.
Similarly, the IHS Markit Services PMI climbed from 53.2 in November to 54.9 in the final month of the year, the best result since March. New business continued to increase at a solid pace in December; that said, export sales continued to disappoint as political and economic uncertainties weighed on foreign demand. Regarding prices, although operating expenses rose on higher fuel and utility prices and labor costs, firms kept their selling prices unchanged amid competitive pressures. Lastly, service providers raised their workforce numbers yet again, while business confidence improved to a five-month high in December.
Author: Javier Colato, Economist