Link Securities | According to S&P Global, Spain’s services purchasing managers’ index (PMI) fell in August to 53.2 points from 55.1 points in July, falling well below the 55.3 points expected by FactSet analysts. Any reading above 50 points indicates expansion of activity compared to the previous month, and below that level, contraction. According to this index, activity in Spain’s services sector has been expanding on a monthly basis for two years now.
In their report, the analysts who compile the index note that in August, the increase in activity in the Spanish services sector was once again mainly linked to the increase in new orders. In addition, for the second consecutive month, there was a modest increase in new orders from foreign customers, which boosted new orders in general.
For their part, companies were encouraged to hire additional staff in August, mainly in response to increased workloads in general. In fact, capacity remained limited, a fact underlined by the largest increase in outstanding orders so far this year. Some companies mentioned staff shortages in their units.
Meanwhile, business expectations remained positive overall, with planned improvements to products and services expected to drive activity growth over the next twelve months. Some uncertainty remained in the outlook, which meant that overall confidence remained below its historical level. Price data also revealed a pick-up in inflationary pressures. Overall purchase prices rose at their fastest rate since February, with companies reporting that suppliers increased their selling prices across the board. Service companies took advantage of the positive demand environment to pass on higher input prices to their customers wherever possible. This helped to underpin the sharpest rise in selling prices since April 2024, with inflation once again comfortably above its long-term trend level.
