Spain: Composite PMI rebounds in February
The IHS Markit Composite Purchasing Managers’ Index (PMI) jumped to 56.5 in February from 47.9 in January, mainly reflecting a sharp turnaround in the services sector amid falling Omicron infections. Consequently, the index bounced back above the 50-threshold, signaling expanding business activity over the previous month.
The IHS Markit Services PMI surged to 56.6 in February from 46.6 in January, signaling strong increases in activity and new business. Moreover, firms hired additional staff at a faster pace. On the price front, input costs continued to rise sharply, fueled by higher prices for fuel, energy, wages and other supply costs. Therefore, companies hiked output prices at the fastest pace on record. Lastly, confidence strengthened thanks to hopes of a waning pandemic as well as prospects of higher investment.
Meanwhile, the IHS Markit Manufacturing PMI rose to 56.9 in February from 56.2 in January, amid a sharper increase in production, employment and purchasing activity. Meanwhile, new orders rose at a strong albeit somewhat softer pace, while supply chain disruptions continued to weigh on production capabilities. On the price front, input prices increased at a softer, albeit still strong, pace amid higher energy and utility prices, while the rise in output prices was the fastest on record. Lastly, confidence regarding the future hit an over four-year high.
Commenting on the Services PMI, Paul Smith, economic director at IHS Markit, stated:
“The challenges of the pandemic continue to linger, but there is a growing confidence amongst companies that sales and activity will continue to build over the coming year.”
Commenting on the Manufacturing PMI, Smith noted:
“Evidence of a bullwhip impact in purchasing persisted with firms raising their input buying and engaging in input inventory building to the greatest degree in 24 years. Although firms are rationally trying to get ahead of product shortages and expected price rises, such behaviour, from a macro perspective, is adding further fuel to already elevated inflationary pressures.”