Spain PMI

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Spain: Economic conditions improve on services; manufacturing gauge eases slightly

August 5, 2014

The Markit Purchasing Managers’ Index (PMI) Composite Output Index ticked up from 55.2 in June to 55.7 in July, which marked a three-month high. As a result, the index is resting comfortably above the 50-threshold that separates expansion from contraction in business conditions, as it has for nine consecutive months.

The Markit Spain Services PMI improved in July and marked a three-month high. July data showed that new business expanded at the fastest pace since November 2006, which supported job creation and a pick-up in the service sector. In addition, companies continued to lower their output prices.

The Markit Spain Manufacturing PMI retreated slightly from June’s multi-year high on lower rates of expansion in output and new orders. That said, the manufacturing sector continues to record solid growth. Markit analysts added that, “firms displayed a measure of confidence regarding the near-term outlook as they took on extra staff and increased stocks of purchases, ending a sequence of decline which lasted almost seven years. Meanwhile, there appears to be some cost inflationary pressure building within the sector for the first time since late 2012.”

The Central Bank expects the economy to grow 1.3% in 2014 and sees it accelerating to a 2.0% expansion in 2015. Moreover, the government announced that the Spanish economy would grow 1.2% this year before accelerating to 1.8% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.1% in 2014, which is unchanged from last month’s forecast. In 2015, panelists expect the economy to expand 1.6%.


Author: Ricard Torné, Lead Economist

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Spain PMI July 2014

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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