SPAIN'S dominant services sector contracted again in March after weak growth in the previous month, suggesting activity is likely to remain fragile for some time, a key survey showed yesterday.
Markit's purchasing managers' index of companies providing services from trucking to banks fell to 48.7 in March, having climbed above the 50.0 level that separates growth from contraction for the first time in seven months in February.
That was below the 50.5 level forecast by economists, and showed that a solid recovery in a sector that makes up around 70 percent of the country's economy will take time.
Spain's economy is expected to grow weakly in each quarter this year. The country may be forced to take additional measures to slash its deficit should it not grow as much as a government estimate of 1.3 percent for the year as a whole.
The slowdown in the PMI came as employers increased the pace of layoffs in a country already suffering unemployment of more than 20 percent, the highest rate in the European Union. The employment index fell to 46.2 in March from 47.5 in February and has now been below 50 for more than three years.
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