- Prior 56.2
- Composite PMI 54.0
- Prior 55.1
The growth in the Spanish economy is starting to moderate towards the end of Q1. The good news is that firms are still retaining a positive outlook but cost pressures are still holding up, even if input prices did ease slightly from February’s one-year high. But in any case, all of this is now old data amid a change in the new trade and economic regime under Trump’s tariffs. So, there’s not too much to meaningfully extrapolate from these reports now. HCOB notes that:
“The Spanish private sector economy is growing sustainably but with a moderating pace in March, as the HCOB composite
PMI posted at 54.0, down from 55.1 in February. The weaker overall performance is a result of softening growth in services
and continued weakness in manufacturing. In the service sector, one can observe that business activity and incoming
business growth remain comfortably high, although index values softened compared to the previous month. Nevertheless,
overall services demand is constantly growing, with new export business even accelerating on the back of increased tourism
inflows as panellists reported.
“Outstanding business growth moderated in the month which is in line with slower growth in business activity. Although this
little softening is happening, service companies do not lose faith in their business, which is expressed in their willingness to
further add to their staffing levels to take on higher sales. Business expectations are anchored slightly above long-term
average for the year ahead already.
“After the slump in official inflation data there are also signs for disinflationary processes in our HCOB PMI price data. After
three months of acceleration in input price inflation, which incorporates wages, the trend of acceleration ended, although still
on an elevated level. Anecdotal evidence shows that labour costs is furthermore the key cost driver. Little changed on output
price inflation, which is still posting above average in order to pass on costs to customers.”
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