Spain PMI


Spain: Economic conditions improve in October

November 4, 2015

The Markit Purchasing Managers’ Index (PMI) Composite Output Index rose from 54.6 in September—which had marked a nine-month low—to 55.0 in October. As a result, the index is now further from the 50-threshold that separates expansion from contraction in business conditions.

The Markit Spain Services PMI rallied from its worst reading in 2015 last month and moved further into expansionary territory in October. New business and activity rose at a faster pace in October and more jobs were added. Markit analysts added that, “the slight pick-up in growth rates of activity and new business was a positive from the latest services PMI survey as it broke the recent momentum of slowing rates of expansion, and provides optimism that solid increases can be recorded during the remainder of the year. Growth in client demand provided some opportunity for firms to increase their output prices, helping them to improve profit margins amid weakening cost inflation.”

Meanwhile, the Markit Spain Manufacturing PMI fell to a 22-month low in October, on the back of a slowdown in output. However, new orders picked up pace—albeit marginally—from the previous month, while input costs fell from the second month in a row. In addition, the rate of job creation eased. Markit analysts pointed out, “the forthcoming election is likely resulting in some caution among firms and clients alike as they wait to see the outcome of the December vote. There is little such reticence among export clients, however, with the rate of growth in new business from abroad quickening to the fastest since June and comfortably outpacing the rise in total new orders.”

FocusEconomics Consensus Forecast panelists expect GDP to expand 3.1% in 2015, which is unchanged from last month’s forecast. In 2016, panelists expect the economy to increase 2.7%, which is also unchanged from the previous month’s estimate.

Author: Angela Bouzanis, Senior Economist

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Spain PMI Chart

Spain PMI October 2015

Note: Markit Spain Purchasing Managers’ Index Composite Output Index. A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit.

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