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Spain's Service Sector Contracts Sharply

5/4/2012 3:30 AM ET

Spain's service sector shrank notably in April as both activity and new business fell at sharp rates, data from Markit Economics showed Friday.

The headline seasonally adjusted Business Activity Index fell to 42.1 in April from 46.3 in the previous month. Economic crisis in Spain had been the main depressor of activity.

New orders declined further in April, and the rate of decrease in outstanding business quickened. The labor market conditions worsened, with employment falling for the fiftieth successive month.

The rate of input cost inflation remained modest, and slowed marginally during the month. In response to strong competition for any available new orders, service providers lowered their output prices again.

"While it is hoped that conditions will improve over the coming year and support a rise in activity, there were few fundamental reasons for optimism reported by survey respondents," Andrew Harker, economist at Markit said.

by RTT Staff Writer

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