ibusinesslines.com October 18, 2018

Spain services growth accelerates slightly in December, PMI shows

13 January 2018, 01:36 | Kelvin Horton

Spain services growth accelerates slightly in December, PMI shows

Indicates a marginal uptick in services sector activities. File

Inflation decelerated at the slowest pace in nearly three years due to lower interest rates and employment costs, a competitive framework in which 'service providers may have to resort to heavy discounts to stimulate demand, ' said the Markit economist, Pollyanna De Lima. Especially, survey respondents noted higher prices for blocs, insulation, bricks and roof tiles, along with continued rises in the cost of imported products. Buoyed by increase in output and new orders, Nikkei Manufacturing Purchasing Managers' Index showed a steady growth.

The index also remained above the 50 threshold that separates contraction from expansion for the 16th month in a row.

"Total new orders picked up at the fastest pace for seven months in December, which provides a positive signal for construction workloads in the short-term". The latest upturn in input buying was the steepest for two years, which survey respondents greatly attributed to increased business requirements.

In terms of job creation both sectors - manufacturing and services - outstripped historical averages signalling a continued revival of the labour market.

The average PMI for the fourth quarter stood at 53.9, however, the strongest since the second quarter of 2014.

"A key development to watch out for in 2018 is the potential advent of accelerating inflation", said Larry Hatheway, chief economist at GAM.

Sterling was marginally higher versus the United States dollar at 1.359 following the announcement, while the pound lifted 0.1 per cent against the euro at 1.128.

Like the headline PMI, a reading above 50 indicates that new orders grew from a month earlier. Kallum Pickering, senior United Kingdom economist at Berenberg bank, said the figures likely point to 0.5 per cent growth in the final quarter, an acceleration. Global growth also got a boost from a solid reading in China's manufacturing sector.

United Kingdom construction companies indicated an uneven recovery in business activity at the end of 2017.

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