Spain December services PMI 51.5 vs 51.2 expected

<ul><li>Prior 51.0</li></ul><p>New work returns to growth territory as services activity in Spain continues to stay resilient. That being said, selling price inflation has moved up to a seven-month high and could be a cause for concern for the ECB if the trend persists. HCOB notes that:</p><p>"In contrast to the overall economic weakness in Europe, Spain’s service sector appears to be charting its own course.
Rather than succumbing to the broader economic downturn, service providers in Spain are still on an expansion trajectory.
While it is far away from a full-blown boom, the resilience is surprising, especially considering the subdued mood in the
manufacturing sector and the lacklustre performance of the service sector in other parts of the Eurozone. This noteworthy
performance may be attributed to two key factors: the new government's commitment to extend measures supporting private
households and, secondly, the warm temperatures in recent weeks possibly inspiring residents of Spain to head to the
beaches, leading to increased spending.
</p><p>"With the composite PMI edging into slight expansionary territory, there's a strong indication that Spain’s GDP will maintain
its growth trajectory in the fourth quarter. Our GDP Nowcast, which takes into account the PMI indicators, reinforces this
expectation.
</p><p>"In a fitting holiday spirit, December brought a gift to private households in the form of new jobs. Service providers ramped
up their hiring pace. It's hardly surprising, then, that wage-driven input prices have risen at a similarly rapid pace compared
to last month. This sets in motion a positive feedback loop, where increased employment and higher wages fuel greater
consumer demand, resulting in elevated sales for businesses and so forth. As the year concludes, it appears that Spain is
poised to enter the new year from a solid starting position.
</p><p>"The service sector in Spain is witnessing a brightening outlook. New business is on a solid upturn, and the contraction of
outstanding business has, by and large, subsided. What's more, businesses are displaying increased optimism about their
output in the next 12 months when compared to the preceding month – a promising note to wrap up the year."</p>

This article was written by Justin Low at www.forexlive.com.