Spain: Composite PMI falls to seven-month low in April
May 6, 2019
Largely reflecting slower activity growth in the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) dipped to a seven-month low of 52.9 in April from 55.4 in March. That said, the index remains well above the 50-point threshold, indicating healthy expansion in business activity.
The IHS Markit services PMI declined from an over-year high of 56.8 in March to 53.1 in April. Growth in activity and new business softened in April amid heightened political uncertainty ahead of the general election. That said, their pace of expansion remained solid. Meanwhile, companies continued to take on additional staff, with employment growth hitting a nine-month high in April. On the price front, input cost inflation rose notably yet again, reflecting higher salaries and fuel costs, which led service providers to lift output charges in a bid to protect margins. Lastly, although business confidence remained upbeat in April, it declined to its lowest level since August 2013.
In contrast, the IHS Markit Manufacturing PMI rose to 51.8 in April from 50.9 in March. April’s upturn mainly reflected faster growth of both output and new orders. Notably, new orders grew at the fastest pace in 10 months, thanks to strengthening demand. In addition, firms continued to create jobs in the surveyed month, with the rate of staff intake quickening to a three-month high. Regarding prices, input cost inflation accelerated due to higher commodity prices, which led manufacturers to lift output charges, albeit marginally. Finally, business confidence strengthened in April amid improved expectations over sales and production in the year ahead.
Author: Javier Colato, Economist