Spain Service Sector Slips Into Contraction In September

(RTTNews) - Spain's service sector activity contracted for the first time this year amid a fall in sales, survey results from S&P Global showed on Wednesday.

The services Purchasing Managers' Index dropped to 48.5 in September from 50.6 in August. Any score below 50.0 indicates contraction in the sector. The index was forecast to fall to 49.8.

Both activity and new business fell for the first time in nine months, as market conditions were becoming increasingly difficult, characterized by uncertainty and worries over inflation. New export business declined for the third successive month.

Input price inflation accelerated to a three-month high in September, mainly driven by increased energy and utility costs.

"Firms are reluctant to hire new staff at a time of uncertainty and with cost pressures increasingly elevated, confidence about future growth remains subdued to say the least," Paul Smith, Economics Director at S&P Global Market Intelligence, said.

The Spanish private sector also slipped in to contraction in September, with both the manufacturing and services economies recording falls in output. The composite output index dropped to 48.4 from 50.5 in August.