(RTTNews) - An index measuring services sector activity contracted at the slowest pace in the 22-month period of decline, a survey by Markit Economics said Wednesday.

The seasonally adjusted Business Activity Index rose 47.7 in October from 46.4 in September. A reading above 50 indicates expansion, while a reading below 50 signals a contraction.

There was further deterioration in business conditions, but rate the decline in activity, orders and employment slowed.Outstanding business fell at the steepest pace in three months, while backlogs declined in each month since October 2007.

Input prices continued to rise, but the inflation was weaker than the long-run average. At the same time, the rate of decline in output prices accelerated at the fastest pace since June.Charges dropped for the 15th consecutive month, with the latest fall coming despite a third consecutive rise in input prices.

Meanwhile, optimism about the 12-month outlook was at weakest level since May, but still strong, as firms said company-restructuring and launch of new projects would support demand.

Commenting on the Spanish Services PMI, Andrew Harker, economist at Markit said, “Although the latest PMI data indicate that the Spanish service sector moved closer to stabilization in October, the improvements in key indices such as new business and employment were only marginal.”

“The acceleration of the decline in charges highlights the weakness of demand in the economy as companies are forced to cut prices in order to secure sales”, he noted.

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Posted in Categories: Economy, Eurozone, Releases.

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