Spain: Composite PMI drops to joint-lowest level in nearly six years in September
Reflecting a sharper deterioration in manufacturing activity and slower growth of the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) edged down from 52.6 in August to 51.7 in September, matching July’s reading which had marked a near six-year low. The index, however, remained above the 50-threshold, indicating healthy expansion in business activity.
The IHS Markit Manufacturing PMI dipped from 48.8 in August to 47.7 in September, marking the lowest reading since April 2013. As a result, the index moved further below the 50-threshhold, where it has been for four consecutive months, and signaled contractionary conditions in the sector. Both production and new orders fell more markedly than in August amid deteriorating demand conditions at home and abroad. Notably, new export orders declined at the sharpest pace since July 2012, weighed on by political and economic uncertainties. Additionally, manufacturers reduced staff levels for the fifth consecutive month, while confidence tumbled to the lowest point since early-2013. On the price front, both input costs and output charges slid in September.
Meanwhile, the IHS Markit Services PMI slipped from 54.3 in August to 53.3 in September on slower new business growth, primarily due to softer demand from foreign markets amid Brexit-related uncertainties and weaker global activity. Concerns over Brexit in part led business confidence to remain subdued and among the lowest levels seen over the past six years. For its part, the pace of job creation was modest in the surveyed month. Lastly, on the price front, despite rising labor costs putting additional pressure on operating expenses, service providers cut selling prices again in September due to strong competition.