S&P Global Spain Composite Purchasing Managers Index (PMI)

Markit Composite Purchasing Manager Index is a monthly summary report concerning the changes in the working conditions of private companies in the manufacturing and service sectors. The indicator is based on monthly surveys of purchasing managers working in the country's largest private companies.

Often purchasing managers can track changes in market conditions prior to other company employees, because purchases precede company's production activities.

The Markit Composite PMI only includes data about private companies. Purchasing managers complete a questionnaire, in which they assess the basic parameters of their work: input and output prices, employment, production, new orders, etc. Respondents provide a relative assessment of the related parameters and determine whether the situation has improved, deteriorated or has not changed. Individual subindexes are calculated based on these answers. These subindexes characterize inflation, employment and other key indicators of economic activity. Each response is weighted according to the size of a company and its contribution to the total production or services of the subsector it belongs to. Thus, the largest companies make a greater contribution to the index calculation. The final reading is seasonally adjusted. Readings above 50 indicate the economy growth and can have a positive effect on euro quotes. Lower values may indicate possible decrease in economic activity. Readings below 42 can be an indication of possible recession. A value higher than expected can be seen as positive for the euro quotes, while a lower value is usually seen as negative.

PMI is one of the most popular indices which is closely monitored by analysts. It provides operational information covering business activity in the entire Spanish private sector and has a great share in national GDP. It is interpreted as a leading economic development and inflation indicator.