"Surprising" Services Growth Offset By Very Weak Manufacturing

Spanish November PMI readings beat expectations, with Services at a 4-month high 51.2 (50.5 expected, 49.7 prior) and Composite at 49.6 (48.5 expected, 48.0 prior).

• Like other November eurozone PMIs, Spain's suggested that price pressures remained central to Service firms' concerns, with businesses passing through rising wage and other input costs (prices charged rose the fastest since June and for the 20th consecutive month).
• But as elsewhere in the eurozone, activity levels were not as bad as feared heading into what promises to be a challenging winter.
• S&P Global, which compiles the survey, called it "somewhat surprising" - given multiple headwinds facing the Spanish economy - that the November reading showed Services activity growth and the first improvement in sales in 4 months, with new orders ticking higher.
• Services employment growth remained positive, with the extra labor input helping reduce backlogs.
• The Composite number remained contractionary, with the Services improvement weighed down by Manufacturing (released last week, 45.7 vs 46.0 expected and 44.7 prior) and in particular a sharp drop in new Manufacturing orders.