Services PMI Indicates Further Inflationary Pressure
Spanish services PMI for November was slightly below expectations at 51.0 (vs 51.5 cons; 51.5 prior), but the details suggest continued inflationary pressure and labour market tightness - albeit against the backdrop of continued economic uncertainty. Key notes from the release are:
- "Higher typical wage costs were widely reported to have driven up operating expenses in the latest survey period".
- "Output charges were again raised in response to increased costs, and latest data implied a stronger degree of pricing power amongst service providers".
- Firms saw an expansion in employment numbers (consistent with the falling services unemployment claims data released yesterday), with some noting "efforts to replace leavers amid some positive projections for growth".
- "Activity was supported by the provision of new services and to help facilitate the clearance of workloads at units", but constrained by "a lack of incoming new work".
- "Firms commented that market conditions remained subdued, with decision-making amongst clients characterised by a high degree of hesitation and uncertainty in the economic outlook".