Spain's services sector contracted in April at the sharpest pace so far this year as the economic crisis contributed to client uncertainty and a further fall in new business.
The headline seasonally adjusted Business Activity Index fell to 44.4 in April from 45.3 in March, survey results from Markit Economics showed Monday. A reading below 50 suggests contraction in the sector.
Anecdotal evidence suggested that the economic crisis in Spain was again the key factor leading to lower activity as clients were reluctant to commit to new projects.
New business fell markedly in April and outstanding business decreased further as companies reacted to falling orders. Consequently, firms reduced job creation.
"Hopes that a recovery would get underway in the second half of this year are fading fast as the vicious cycle of job cuts and falling demand shows no sign of letting up," Andrew Harker, economist at Markit and author of the report said.
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