Economic activity in Spain starts year with contraction

Photo: ANP

Economic activity in Spain declined last month, while the omikron variant of the corona virus took hold. The eurozone as a whole still saw modest growth in activity in January, but this was the weakest increase in almost a year, according to new figures from British market researcher IHS Markit.

Everywhere, it was mainly service companies, such as shops, restaurants, cafes and carriers, that suffered greatly from the tightened restrictions to prevent the spread of the virus. In Spain, the indicator that IHS Markit tracks for the services sector fell so much that the composite Purchasing Managers Index, which also includes data on the industry, also indicated a contraction.

The impact of the virus wave was also clearly visible in Italy. There, activity in the services sector also declined, with overall activity barely holding up. This is stated in reports that are usually closely monitored in the financial markets.

IHS Markit is looking at how things went in several major euro countries last month. Almost everywhere the picture is slightly more pessimistic than previously outlined in a preliminary estimate. But across the board, the service sector and business as a whole still showed slight growth.

Chris Williamson, chief economist at IHS Markit, noted earlier that spending on many consumer-oriented services has clearly declined. But the overall economic impact of the virus wave is “relatively moderate,” he noted at the time.

The decline in consumer and business demand is not only due to the stricter corona restrictions. Also, many companies suffer from supply chain problems or staff shortages. Consumers have seen prices continue to rise sharply in recent months. As a result, many people do not think it is a favorable time to make large purchases at the moment, other research has already shown.

Economic activity in Spain starts year with contraction
Source link Economic activity in Spain starts year with contraction

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