High inflation and uncertainty weigh on the services sector
MADRID, 5 Oct. (EUROPA PRESS) –
In September, the activity of the private sector in Spain suffered its first contraction since last January as a result of the impact of inflation and uncertainty, as reflected in the Composite Purchasing Managers’ Index (PMI), which fell to 48.4 points from 50.5 in August, its worst reading since January 2022.
The fall in the activity of Spanish companies reflects the contraction both in the manufacturing sector, where the PMI fell in September to 49 points from 49.9 the previous month, as well as in the services sector, whose index fell 50 points per first time since January, with a reading of 48.5 integers, compared to 50.6 in August.
The lack of new orders received was the main reason for the contraction of the Spanish private sector in September, which translated into a sharp reduction in backlogs in companies and slight job cuts, while confidence in the future remained historically moderate.
Also, cost inflation remained the main concern for businesses in Spain, as prices in September increased at the steepest rate in three months, due to higher energy and utility bills, while that the inflation of the prices charged also picked up since August.
In the case of the services sector, activity contracted in September for the first time since the beginning of the year amid a drop in sales, which led companies in the sector to complete pending orders.
Partly in response to this decline in backlogs, job losses were recorded in the sector, but these were also due to lower confidence in the future.
“September was a difficult month for companies in the Spanish services sector,” said Paul Smith, economist at S
Likewise, the expert indicated that companies are reluctant to hire more staff in a time of uncertainty and as cost pressures are increasingly high, “confidence about future growth remains, at best, moderate “.
