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Spain's service activity slows again in June -PMI

Spain's service activity slows again in June -PMI
Spain's service activity slows again in June -PMI   -   Copyright  Thomson Reuters 2022
By Reuters

MADRID – Activity in Spain’s services sector slowed again in June as soaring inflation continued to impact businesses, which in turn fuelled pessimism, a survey showed on Tuesday.

S&P Global’s Purchasing Managers’ Index (PMI) of services companies, which account for around half Spain’s economic output, fell to 54.0 last month from 56.5 in May.

That was still well above the 50 mark that indicates growth, although June’s reading was the lowest since March.

Respondents to the survey said more hiring and higher personnel costs had added to dearer energy, fuel and supplier goods in general.

“With elevated price pressures likely to persist in the near-term at least, demand – and with that activity growth – is set to be adversely impacted in the months ahead,” S&P Global Economics Director Paul Smith said in a report.

“This showed up in confidence data, which showed the lowest degree of optimism recorded by the survey since late 2020.”

Spain’s 12-month inflation surpassed 10% in the period through June for the first time in 37 years, official data showed last week.

A sister PMI survey on Friday showed activity growth in the manufacturing sector also slowed down last month adding concern the risk of stagflation increases.