Services sector expands again for first time in three months
New orders grow at fastest pace since 2007
The Spanish economy continued its patchy recovery in November after two years in recession as the services sector, which accounts for about two-thirds of GDP, expanded by the biggest amount since June 2010, consultant Markit said Wednesday.
Markit’s Purchasing Managers’ Index rose from 49.6 points in October to 51.5 last month. That was the first time it had moved above the 50-point cut-off point between expansion and contraction in three months.
In contrast, a report released earlier this week by Markit showed the Spanish manufacturing sector had contracted again in November as new orders fell for the first time in six months, underlying the erratic nature of the incipient recovery.
One of the main reasons behind the renewed expansion in the services sector was an increase in new business, with new orders growing at their fastest pace since July 2007. However, despite that companies continued to lower staffing levels. According to Labor Ministry figures released Tuesday, jobless claims in November fell for the first time in that month since 1989.
Sentiment among respondents to Markit’s survey on a 12-month horizon improved for the third month in a row, with about 47 percent of those taking part in the survey expecting a rise in activity in that period, the best reading since July 2007.
“The Spanish services sector enters the Christmas period on a relatively positive note,” Markit economist Andrew Harker said. However, we have seen before how quickly signs of optimism can be dashed and the possibility remains of a further downturn should the current tentative domestic economic recovery run out of steam.”