Activity growth in the Spanish services sector accelerated in June to its best reading since March 2000 due to the lifting of restrictions, as reflected in the Purchasing Managers’ Index (PMI) which rose to 62.5 points from 59,4 last month, according to consultancy IHS Markit.
Similar to activity, the growth of new orders was the strongest recorded by the study since June 2000, although the source of demand was mainly at the national level, as restrictions that continued to apply to travel and tourism continued to limit sales outside the country.
This strong increase in new orders from the services sector has put the sector’s capacity to the test, as evidenced by the significant increase in pending orders, or which has prompted companies to hire more employees, boosting hiring at a faster rate in the past three years.
“There could be some concern about the relative weakness of tourism, as restrictions and challenges in the travel sector from key markets such as the UK affect growth,” said Paul Smith, economist at IHS Markit, who if these issues are resolved for him. Spain will be on its way to achieving stronger growth in the coming months.
On the other hand, the pace of growth in the Spanish private sector manufacturing activity accelerated in June to reach the highest rate of expansion since April 1998, with the PMI reading for the sector at 60.4 compared to 59.4 in the previous month.
Thus, the composite PMI for the Spanish economy in June reached its best level since February 2000, at 62.4 points compared to 59.2 in May.
The increase in demand and backlogs by firms in the manufacturing and services sectors led to the largest net increase in employment in a month since February 2007, while optimism in the Spanish private sector reached an all-time high.