Spain May services PMI 50.1 vs 48.0 expected
- Services PMI 50.1 vs 48.0 expected
- Prior 47.9
Overall business activity in the services sector recovered in May, supported by a marginal increase in
new business. So, that’s some good news as demand conditions hold up despite the continued uncertainty from the Middle East conflict.
That being said, the underlying performance continues to be rather poor with the second quarter poised to be one of the worst in over five years. So, there’s that to consider when viewing the headline reading as a benchmark. Mind you, Spain has always been one of the brighter spots in the euro area economy despite the struggles seen in Germany, Italy, and now France over the years.
Besides that, cost pressures remained acute in May. Of note, input prices
rose considerably since April, driven mainly by increased fuel
and energy costs. Meanwhile, output charges also rose in response to higher
operating expenses, although competitive pressures placed
some restriction on corporate pricing power.
S&P Global notes that: “Input prices rose to their fastest degree since
November 2022. In contrast, output price inflation fell to a
three-month low, though remained above its historical trend and indicative of a
marked increase in prices charged."
As such, the outlook is far from signaling an improvement and a more optimistic take on things even if activity was better than in April.
This article was written by Justin Low at investinglive.com.