World Economy

Spain PMI Expands Despite Slow Momentum in Eurozone

Spain PMI Expands Despite Slow Momentum in EurozoneSpain PMI Expands Despite Slow Momentum in Eurozone

Spain’s service sector, which accounts for around half of total economic activity, expanded at its fastest rate in seven months in February, a survey showed on Monday, with job creation and new-order growth continuing at a healthy pace.

Markit’s purchasing managers’ index of service companies stood at 57.3 in February, up from 56.9 in January. The index has held above the 50 line separating growth from contraction every month since October 2013, Reuters reported.

“The growth rebound in the Spanish service sector continued in February, with the rate of expansion in business activity quickening for the third month running,” associate director at HIS Andrew Harker said.

Political concern over Catalonia, which briefly hit the regional economy and confidence at the end of last year after the local government declared independence, has eased and the first quarter looks strong, Harker said. Spain’s economy grew 0.7% in the fourth quarter from a quarter earlier, official data confirmed on Thursday, lifted by exports and rising domestic demand. The service employment index rose slightly to 55.4 in February from 55.3 in January, as some of those surveyed said that they were increasing their workforce in line with rising new orders, Markit said.

Meanwhile, the eurozone economy may have lost a little more momentum than initially estimated in February, adding to signs that the pace of growth may be moving past its peak.

IHS Markit’s composite PMI slipped to 57.1 from 58.8 in January, it said Monday. That’s the weakest in four months and below the flash estimate of 57.5. The index for services activity was also revised lower.

The report showed that Germany, the region’s largest economy, grew the least in three months, while France also cooled. In Italy, which held national elections at the weekend, the composite PMI also declined, albeit from a 10 1/2-year high.

The figures follow confidence surveys in recent days that show expansion in the 19-nation region may be coming off the boil after the best year in a decade in 2017. Economists surveyed by Bloomberg see growth of 2.3% in 2018. That’s down from 2.5% in 2017, but still a solid pace.

IHS Markit noted that the PMI readings, which are well above the key 50 level, indicate quarterly growth is running at a quarterly pace close to 1%.

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