July 3, 2014

The Markit Purchasing Managers’ Index (PMI) Composite Output Index ticked down from 55.6 in May to 55.2 in June and is still resting comfortably above the 50-threshold that separates expansion from contraction in business conditions as it has for nine consecutive months.



The Markit Spain Services PMI moderated in June, but remained in expansion mode. June data showed that, although input prices quickened and demand appears to be robust, businesses continued to lower the prices they charge. The Markit Spain Manufacturing PMI remained strong in June, jumping to its highest level since 2007. According to Markit, “sharp rises in output and new orders were recorded, while the rate of job creation picked up to its strongest since mid-2007. This all added up to the strongest monthly improvement in the health of the sector for seven years. Adding to positive signs was a second successive monthly rise in output prices as client demand strengthens.”

The Central Bank expects the economy to grow 1.2% in 2014 and to accelerate to a 1.7% expansion in 2015. Moreover, the government announced that the Spanish economy would grow 1.2% this year before accelerating to 1.8% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.0% in 2014, which is unchanged from last month’s forecast. In 2015, panelists expect the economy to expand 1.6%.