Spain Economy Shows Mixed Signs as June Repeat Vote Loomsby
May services beat estimates, while manufacturing lagged
Spaniards head to polls for second time in 6 months on June 26
Spanish economic activity indicators posted a mixed performance as the nation enters the final weeks before a general election on June 26 that pits the conservative government led by Acting Prime Minister Mariano Rajoy against an array of rivals looking to oust him.
While a gauge for the services industry beat expectations, jumping to 55.4 in May, manufacturing slipped for the month to 51.8, according to a report issued Friday. The composite index, which combines the two, was at 54.8, below last month’s reading but still higher than the estimate calling for a decline to 54.2.
The data come a day after jobless claims fell by approximately 119,800 people in May, beating a Bloomberg News survey. That took the overall number of unemployed Spaniards below 4 million for the first time in six years as the nation ignored political uncertainty after an inconclusive December election to continue growing.
While the acting government officially sees growth of 2.7 percent in 2016, Acting Economy Minister Luis de Guindos has signaled the strong start to the year is putting the nation on track to grow closer to 3 percent. The economy grew 0.8 percent in the first quarter and early indicators point to sustained growth in the April to June period.
Traditionally, the Spanish economy outperforms in the third quarter, coinciding with the summer months, which see a pickup in the services sector as new staff is added to cope with increased tourism demand.
Polls indicate the People’s Party will extend extend its lead in this month’s vote, but still finish short of a majority. The anti-austerity group Podemos is seen overtaking the Socialist party in second place in what is expected to be a highly fragmented vote.