Spain: Composite PMI suggests healthy growth in December
The IHS Markit composite Purchasing Managers’ Index (PMI) increased modestly to 55.4 in December from 55.2 in the previous month, marking the third consecutive month of a pick-up in the index. While still below the series average for the year, the composite PMI continued to recover ground lost following October’s setback that was largely associated with Catalonia-related political uncertainty. As a result of December’s figure, the index lies further above the 50-point threshold, indicating healthy expansion in business activity in the last month of the year.
The IHS Markit services PMI recorded a small uptick in December, rising to 54.6 from 54.4 in November. The rate of expansion in business activity and new orders accelerated after two months of moderation. Business sentiment was also more upbeat in December after recording moderations in both October and November. Meanwhile, a pick-up in new order growth and expectations of improving economic conditions prompted companies to increase their staffing levels at a healthy rate in December. Regarding inflation, both input and output prices rose in December compared to the previous month.
Ending the year on a strong note, the IHS Markit manufacturing PMI came in at 55.8 in December, slightly below November’s over one-decade high of 56.1. Despite being down slightly from the previous month, December’s PMI signaled a solid performance of the Spanish manufacturing sector.
Output growth was the star-performing component of the index, surging to a near 3-year high in December. New orders continued to rise at a robust pace, albeit at a slightly slower rate than in the previous two months. In response to a further increase in the backlogs of work, the job creation rate increased to one of the highest readings observed in the survey up-to-date. Strong inputs demand and suppliers’ stock shortages pushed their delivery times to the highest level since August 2013. Meanwhile, as was the case with service providers, input prices increased in December, partly due to higher oil and steel prices.