Spain’s Manufacturing Sector Shows Strength

MADRID (Reuters) – Spain’s manufacturing sector ended 2024 on a strong note, with both output and new orders accelerating in December, a survey by S&P Global showed on Thursday, contrasting sharply with the rest of the euro zone.

The headline HCOB Spain Manufacturing Purchasing Managers’ Index (PMI) rose to 53.3 in December from 53.1 in November, marking the 11th consecutive month above the 50.0 threshold indicating growth.

The preliminary survey compiled by S&P Global in the euro zone two weeks ago indicated a contraction of economic activity in December.

Spanish manufacturing’s performance was bolstered by a robust demand environment, with notable increases in new export orders, especially from Europe and North Africa. This strong demand prompted firms to ramp up production and increase staffing levels for the fourth consecutive month.

Despite positive output, firms faced challenges due to supply chain disruptions, partially related to deadly floods in late October.

Input price inflation reached its fastest level in five months, driven by a strong U.S. dollar that lifted the cost of imported goods.

“Spain demonstrates resilience against the European weakness in the manufacturing sector… The production in Spain’s manufacturing sector is booming thanks to a strong order situation,” said Jonas Feldhusen, an economist at Hamburg Commercial Bank, in the S&P report.

Looking ahead, Spanish manufacturers are optimistic, with confidence in the economic outlook improving to its highest since May 2024.

The country’s central bank on Dec. 17 raised its economic growth forecast for the full year to 3.1% from a previous 2.8%. The economy grew 2.5% in 2023.