• Previous 53.1
• Composite PMI 56.8
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This only confirms that the Spanish economy is still one of the few bright lights in the Eurozone, shining again. Business activity picked up in December, supported by a sharp increase in new business. HCOB notes that:

“These are impressive figures for the end of the year. The HCOB Composite PMI for Spain rose significantly in December, driven primarily by strong results in the services sector. The manufacturing industry also showed solid growth. Considering these positive developments, it is quite realistic to expect that Spain’s economic growth could reach 3% in 2024.

“In the services sector, activity increased significantly in December, which is also reflected in the improvement in the order situation. In addition, the effects of the DANA weather phenomenon, which caused flooding in the Valencia region, led to numerous cases of insurance and reconstruction, generating additional orders. Moreover, foreign orders rose again after falling in the previous month, possibly due to increased tourism activity from neighboring European countries, as anecdotal evidence suggests. Increased activity and new orders result in more business. Companies are therefore trying to hire additional workers to cope with the workload.

“Prices are still elevated. In December, the costs for companies and the prices charged also increased. Cost pressure on companies is increasing due to higher wages and rising fuel prices. Looking at the overall history of the price component of the PMI, it is notable that neither input costs nor output costs have stabilized at pre-inflation shock levels. This could indicate that the services inflation problem could worsen again. We expect Spain’s inflation rate to rise to just under three percent in December, further deviating from the ECB’s target.”