October 3, 2014

The Markit Purchasing Managers’ Index (PMI) Composite Output Index decreased from 56.9 in August to 55.3 in September. August’s print had represented an 89-month high. Nevertheless, the index is still resting comfortably above the 50-threshold that separates expansion from contraction in business conditions.



The Markit Spain Services PMI stopped its upward trend in September, falling from August’s multi-year high of 58.1 to 55.8. September data showed that economic activity slowed at the end of Q3 on weaker job creation and a lower expansion in new business. That said, Markit stated that, “growth in the sector remained solid, and the third quarter as a whole saw the economic recovery continue. We would therefore expect to see another decent quarterly rise in GDP when the official data are released.”



Although the Markit Spain Manufacturing PMI retreated to a seven-month low in September, it remained in expansion territory. Markit analysts stated that the, “manufacturing sector continued to tick along nicely in September, completing another solid quarter. Growth continues to be driven by inflows of new business, which supported a further expansion of workforce numbers.” However, Markit noted a reduction in input prices, which signals low inflationary pressures.

Both the Central Bank and the government expect the economy to grow 1.3% in 2014 before accelerating to 2.0% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.2% in 2014, which is unchanged from last month’s forecast. In 2015, panelists expect the economy to expand 1.8%, which is also unchanged over the previous month’s estimate.