Spain August providers PMI 54.6 vs 54.5 anticipated

• Services PMI 54.6 vs. 54.5 expected and 53.9 prior.
• Composite PMI 53.5 vs. 53.4 prior.

Key findings:

• Uplift in growth despite weaker rise in new work.
• Slowest cost inflation since March 2021.
• Sentiment down to eight-month low.

Comment:

Commenting on the PMI data, Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, said:

“While the Spanish are enjoying their summer holidays, there is little movement in the HCOB Purchasing Managers’ Indices
as well. The HCOB Composite PMI continues to signal solid growth and remains nearly unchanged compared to July. As in
the preceding months, growth is primarily driven by the strong services sector, while momentum in the manufacturing sector
is softening.

After an impressive first half of the year with strong economic growth, our HCOB Nowcast model forecasts
continued robust but slightly weaker growth of 0.3 % for the third quarter.
Demand continues to boost the Spanish services sector. Activity in Spain’s services sector accelerated in August,
supported by a continued solid inflow of orders from both domestic and international markets.

Although the growth rates of
new orders are slightly weaker than in the previous month, service providers are still actively hiring new staff as backlog of
works continue to increase.
Higher wages remain the number one cost challenge for Spain’s service providers. While the related input prices index has
fallen to its lowest level in three-and-a-half years, which is good news, it still remains above the historical average.

Prices
charged by service providers are also continuing to rise, though at a slower pace compared to the beginning of the year.
Overall, price pressures in the services sector seem to be easing over the summer. This impression was also confirmed by
the most recently published inflation data for July (-0.5 % MoM) and August (0 % MoM). Accordingly, inflation for the year as
a whole fell to 2.2 % in August.”