- Prior 53.4
The drop in the headline reading sees it fall to the weakest since January, as the rate of expansion of Spain's services sector eases further. A cooling of demand conditions is something to note but at least there are also signs of price pressures coming off the boil even more in July. HCOB notes that:
“Overall, the Spanish service sector remains in good shape. Some momentum in activity and more significantly new orders growth has been lost. But still, the sector seems to be rather resilient despite ongoing efforts by the ECB to slow the economy through the tightening of monetary policy.
“The uncertainty in the context of the general elections of July did not have a notable impact on the service sector, as business confidence has only diminished slightly from a high level.
“Higher wages and a slump in inflation is probably at the core of the relatively solid performance of the Spanish service sector. While consumer price inflation has fallen below 2%, survey participants report that they have to pay higher salary checks. In addition, a robust performance of the tourism sector is certainly playing a part as well.
“The Spanish service providers are ramping up their hiring activity at a good clip. It’s another sign of confidence that there is enough work to do over the next few months.
“Amid the robust figures shown by the PMI over the last months it’s not surprising that the International Monetary Fund has bumped up its growth forecast for 2023 to 2.5% from 1.5%.”