Activity in the key Spanish services sector remained in the doldrums in April as the recession continued to take its toll, according to a report released Monday by consultant Markit.
Markit’s Purchasing Managers’ Index declined at its fastest pace this year to 44.4 points last month from 45.3 points in March. The index has now remained below the 50-point that marks the difference between contraction and expansion for 22 months in a row.
Markit said those who took part in the poll reported further cuts in output prices as businesses sought to stimulate demand, while there was also a steep drop in levels of employment.
Five of the six sectors monitored in the survey posted a decline in activity led by transportation and storage, with the only one to advance being financial intermediation. New orders also fell for the 22nd month in a row.
“The latest Spain services PMI signals more bad news as activity fell at the fastest pace in 2013 to date,” Markit economist Andrew Harker said. “Survey respondents highlighted the Spanish economic crisis as the main factor causing the ongoing decline in the sector, with customers reluctant to spend.
“Hopes that a recovery would get underway in the second half of the year are fading fast as the vicious cycle of job cuts and falling demand shows no signs of letting up,” Harker concluded.