Manufacturing Activity in Spain Sees Slow Growth

MADRID (Reuters) – Spanish manufacturing activity grew for a fifth consecutive month in July, though at a slower pace than the previous month due to weaker demand, according to a survey released on Thursday.

The HCOB Purchasing Managers’ Index (PMI) for Spain’s manufacturing sector, compiled by S&P Global, recorded a value of 51 in July, down from 52.3 in June and 54 in May. This marked the sixth consecutive reading above the 50 level, which separates growth from contraction.

The rate of expansion was the slowest since February, as new incoming orders fell for the first time since January. Panelists reported to S&P that market conditions have become less favorable for the fifth consecutive month.

“The wind in Spain’s manufacturing sector appears to be shifting – headwinds are picking up,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, in the S&P report.

Cost pressures continued to pose challenges for businesses throughout the month.

This slowdown in manufacturing activity follows a statement from the country’s statistics department on Tuesday, which indicated that the economy had expanded by a faster-than-expected 0.8% in the second quarter.

The Spanish government anticipates that gross domestic product (GDP) will grow by 2.4% this year, while the central bank forecasts a growth rate of 2.3%, significantly outpacing expected growth in other large eurozone economies, such as France, Germany, or Italy.