Spain services PMI slips to 54.2 in Jan, 12-month outlook hits 9-month high

Survey data released by IHS Markit on Friday showed that Spanish service sector remained in growth territory at the start of 2017 amid a sharper expansion of new business. The headline seasonally adjusted Business Activity Index posted at 54.2 in January, down from 55.0 in the previous month but still signalling a solid monthly increase in activity.

Business activity and employment rose solidly again while expectations regarding the 12-month outlook hit a 9-month high. Increases in fuel and labour costs contributed to a further monthly rise in input prices at the start of the year.

Backlogs decreased for the third time in the past four months, after having been broadly stable at the end of 2016. Companies continued to increase their staffing levels in January amid higher client demand. Employment rose across each of the six sectors covered by the survey.

“The Spanish service sector began 2017 on a positive footing.  IHS Markit is currently forecasting a rise of 2.3% in GDP for 2017.” said Andrew Harker, Senior Economist at IHS Markit.