Spain: Composite PMI deteriorates in May while Services PMI increases

The Markit Purchasing Managers’ Index (PMI) Composite Output Index decreased slightly from 55.2 in April to 54.8 in May, which marked the lowest reading in three months. As a result, the index is still above the 50-threshold that separates expansion from contraction in business conditions.

Meanwhile, the Markit Spain Services PMI inched up from 55.1 in April to 55.4 in May, thus hitting the highest reading in six months. Consequently, the index continues in expansionary territory. Markit analysts commented, “the figures provide hope that the sector will be able to successfully weather headwinds such as a weak global environment and domestic political instability and remain in growth territory in the near-term at least.”

Finally, the Markit Spain Manufacturing PMI deteriorated slightly, decreasing from April’s 53.5 to 51.8. Despite the decrease, the index remains above the 50-threshold that separates expansion from contraction in the manufacturing sector. According to Markit, the result came on the back of weaker growth in both output and new orders.

FocusEconomics Consensus Forecast panelists expect GDP to expand 2.7% in 2016, which is unchanged from last month’s forecast. In 2017, panelists expect the economy to increase 2.3%.