In line with better data published for the month of May, (unemployment claims, PMI manufacturing), Services PMI rose to 47.3 in May up from 44.4 in April. It has been the best level since 23 months. A reading below 50 indicates contraction which means thay Spanish economy is just getting less worse. Neverthless, the last data still support government’s forecast of an economic recovery by the end of the year.
More detail from Markit:
“The ongoing decline in the Spanish service sector showed signs of easing in May as activity, new business and employment all fell at slower rates. Meanwhile, input costs rose only marginally and companies continued to lower their output prices at a marked pace.”
Commenting on the Spanish Services PMI survey data, Andrew Harker, economist at Markit and author of the report said:
“Although signalling a continuation of the decline in the sector, the latest Services PMI data for Spain provide some cause for optimism. Activity moved closer to stabilisation than at any time since mid-2011. Following on from a similar trend in the manufacturing PMI data, maybe we are starting to see some light at the end of the tunnel. Developments in the wider euro area economy over the next few months will probably be key to whether this turns out to be a false dawn or the start of a sustained recovery.”