- July services PMI 58.3 vs 54.9 expected
- Prior 54.2
- July composite PMI 56.5
- Prior 53.3
That’s quite the beat with Spain services activity growing strongly in July, with the headline estimate being the highest since March 2023. Market demand was widely reported to have improved while price pressures did show further signs of easing for the most part.
New business growth played a key role in the latest uplift with new work rising by the greatest degree since January last year. However, growth was primarily driven by the domestic
market as new export work rose only modestly and at a rate
well below that of total new work.
On the price front, input price inflation fell further in July for a second successive month to the lowest
since February. That being said, there
remained plenty of reports amongst service providers of higher energy and fuel prices on the month – albeit lower than those reported in June.
All in all, it’s a solid report and will cast aside any worries of stagflation pressures for the Spanish economy. As it has been over the years, Spain remains one of Europe’s brighter spots in terms of economic showing despite the trials and tribulations across the region.
S&P Global notes that:
“Service sector growth took off during July as market
demand strengthened and resulted in a sizeable
increase in new business placed with companies. Firms
subsequently struggled to keep on top of their workloads
and recruited extra staff as a result.
“However, sales growth was in part driven by firms
accepting some margin compression, with selling prices
rising only modestly and to the weakest degree since
March 2021. That was despite input price inflation
remaining elevated amid ongoing reports of higher costs
for energy, fuel and staff. With confidence also dropping
a little since June, and with ongoing uncertainty in the
geopolitical outlook, it therefore remains to be seen
whether July’s stellar rate of sector growth can be
sustained in the near-term.”
This article was written by Justin Low at investinglive.com.