The S&P Global Composite Purchasing Managers’ Index (PMI) rose to 49.6 in November from 48.0 in October. However, the index remained firmly below the 50 threshold, indicating another contraction in business activity over the previous month.
The S&P Global Manufacturing Index rose to 45.7 in November from 44.7 in October. Both output and new orders contracted at a slower, albeit still sharp, pace due to shrinking demand and rising inflation, while employment also fell at a less pronounced pace. Meanwhile, confidence remained largely pessimistic due to mounting global economic uncertainty and a weak demand outlook. On the price front, input and output prices rose at a slower pace than in October.
The S&P Global Services PMI rose to 51.2 in November from 49.7 in October. New orders increased during the month, as did activity. Moreover, functionality has been added. On the price front, input cost inflation remained high, driven by higher wages and energy costs, with output inflation accelerating in response. Finally, business confidence picked up thanks to expectations of higher sales but remained weak nonetheless, weighed down by significant uncertainty about future growth.
Commenting on the forecast, Wouter Thierie, economist at ING, stated:
“After a sharp slowdown in Spanish economic growth in the third quarter, these figures confirm our belief that the Spanish economy will contract in the fourth quarter. […] The negative impact of inflation is still felt on both consumers and businesses and we believe that government measures will not be sufficient to prevent a contraction of GDP in the fourth quarter of this year.”
FocusEconomics Consensus forecast committee members expect GDP to expand 1.1% in 2023, down 0.3 percentage points from last month’s forecast, and 2.1% in 2024.