Spain: Composite PMI slips at the start of 2020 on softer services-sector growth
February 5, 2020
Largely reflecting softer growth of the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) dropped from 52.7 in December to 51.5 at the start of the year. Despite the dip, the index remained above the 50-threshold, indicating healthy expansion in business activity.
The IHS Markit Services PMI fell from 54.9 in December to 52.3 in January, the lowest reading since November 2013. Although new business continued to rise, it expanded at the slowest pace in over six years, as political uncertainties weighed on demand. Moreover, export sales declined for the ninth month running amid Brexit and trade wars fueled uncertainty. Regarding prices, although operating expenses rose sharply again, firms increased output charges only marginally. Lastly, service providers continued to raise their workforce numbers, but business confidence took a hit, declining to one of the lowest levels in more than six years amid the uncertain political climate.
In contrast, the IHS Markit Manufacturing PMI rose from 47.4 in December to 48.5 in January. The improvement mainly reflected softer falls in both output and new orders compared to December. That said, the manufacturing sector continued to show weakness, as export sales were down for the eighth consecutive month and staffing levels were cut at the sharpest pace in over six years. On the price front, both input costs and output charges fell again in the month. Confidence among goods producers, meanwhile, rose to a seven-month high on improved expectations over new product launches and business activity.
Author: Javier Colato, Economist