November composite PMIs improved in Italy and Spain

November composite PMIs improved in Italy and Spain, mainly on the back of stronger manufacturing confidence, while services confidence held firm. Italian composite PMIs edged up to 54.3 in November (+0.4 point), on robust manufacturing output (+1.6 points to 56.8) while services confidence was unchanged at 53.4. Although headline services remained flat over the month, components posted significant changes. 

New orders jumped to their highest level since April 2015 (54.9), leading to better hiring intentions (+1.4 points to 52.0), while business expectations moderated from October's seven-month high. Overall details signal that demand continues to build and that it should support growth in Q4. As for now, the Q4 PMI-based GDP indicator is at 0.3% q/q, matching the forecast. 

In Spain, composite PMIs improved to 56.2 (+1.2 points), reaching a three-month high. The increase was driven primarily by stronger manufacturing confidence (output index up +2.5 points to 54.4), while services also strengthened (+0.8 point to 56.7). Within the services sector, new business rose to a three-month high, on stronger domestic and foreign demand. Anecdotal evidence signalled an increased willingness among clients to commit to new projects, with positive prospects also supporting some increase in hiring intentions. 

Composite PMIs improved for the second month in a row after the relatively weak September print. Together with strong labour market data and solid retail sales, it confirms the view that Spanish growth should moderate only slightly in Q4 to 0.7% q/q. The Q4 PMI-based GDP indicator stands at 0.8% q/q.