• Services PMI 54.2 vs 50.9 expected
• Prior 50.1
• Composite PMI 53.3
• Prior 50.2

That’s a strong upside surprise for Spain’s services sector in June, with marked increases in both activity and new business. Improved market demand was the main tailwind, albeit largely amongst domestic-based clients. New export business was little changed in June.

Besides that, pricing pressures also did ease so that will be of much comfort for the ECB in reading into the inflation outlook ahead of the summer.

S&P Global notes that:

“Stronger confidence in the outlook supported a general improvement in market activity and demand during June. Latest data showed that service providers themselves were much more optimistic, with sentiment strengthening to a four-month high.

Additional hiring coincided with an uplift in typical salary costs, which remained a notable driver of overall increases in operating expenses during the month. Companies added that high energy and fuel prices remained a source of inflation, whilst there was evidence of vendors generally raising their prices as they sought to pass on higher raw material costs.

Although remaining extremely high, input price inflation fell since May, hitting a four-month low. This helped to explain a similar slowdown in the degree to which firms passed on higher operating costs to clients. Overall, output price inflation slipped in June to its lowest level since January.”

This article was written by Justin Low at investinglive.com.