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Spain PMI February 2020

Spain: Composite PMI edges up in February on recovering manufacturing sector

Largely reflecting a return to growth by the manufacturing sector, the IHS Markit composite Purchasing Managers’ Index (PMI) edged up to 51.8 in February from 51.5 in January. Thus, the index moved further above the 50-threshold, indicating healthy expansion in business activity.

The IHS Markit Manufacturing PMI jumped from 48.5 in January to a ten-month high of 50.4 in February, signaling the first improvement in business conditions after eight consecutive months of deterioration. The upturn mainly reflected both output and new orders returning to growth amid stronger customer demand. That said, export sales were down for the ninth month running and goods producers cut staffing levels for the tenth successive month, though their pace of decline softened from January. On the price front, both input costs and output charges fell again. Meanwhile, manufacturers remained confident over their future growth prospects in February.

In contrast, the IHS Markit Services PMI slipped from 52.3 in January to 52.1 in February, the lowest reading since November 2013. Although new business continued to increase, it rose at the weakest pace in over six years on muted demand, particularly from foreign clients as the coronavirus outbreak undermined confidence and activity. Regarding prices, operating expenses rose at the sharpest pace in over a decade, which squeezed profit margins as output charges were lifted only fractionally. Lastly, service providers continued to add to their workforce numbers, though only at a modest clip, while business sentiment remained optimistic though concerns over the impact on activity from the coronavirus outbreak lingered.

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