Spain December manufacturing PMI 53.3 vs 53.5 expected

• Prior 53.1

Spain’s manufacturing activity accelerated slightly in December, helped by a rise in both output and new orders. Employment conditions also held up while inflationary pressures were deemed as “broadly contained”. All of this just continues to reaffirm that the Spanish economy is still one of the few bright spots in Europe at the turn of the year. HCOB notes that:

“Spain demonstrates resilience against the European weakness in the manufacturing sector, also at the end of the year.
While other European countries grapple with severe crisis consequences such as mass layoffs, factory closures, and a
collapse in investments, Spain is experiencing growth in its manufacturing sector. This can be attributed to its broad energy
supply and relatively low export dependence on China. In 2024, Spain’s industrial production is expected to have increased
overall, in contrast to the major other countries in the eurozone. Globally, industrial production is currently recovering
moderately.
“

The production in Spain’s manufacturing sector is booming thanks to a strong order situation, which has been growing for
five months. Foreign orders also support demand. To manage the additional production, companies are still seeking new
workers. A growing backlog of work is therefore not surprising.

“Since September, companies have expanded their quantity of purchases, but inventories are shrinking due to high
production. The procurement situation is exacerbated by long delivery times, which are further pressured by disrupted
supply chains following the flooding in the Valencia region. This increases the pressure on input prices. The strong dollar
adds additional pressure on some imported raw materials and intermediate goods. However, the increase in input prices is
not as pronounced as in previous years when supply chains were sustainably disrupted after the Covid pandemic.

“The outlook remains extremely interesting. Spanish industrial companies are currently quite optimistic, according to the
HCOB PMI survey. However, weakness in Europe, as the most important sales market, is expected to persist in 2025.
Additionally, the new US administration’s tariffs will cause global disruptions. Although Spanish exporters are less dependent
on exports to the USA than other European countries, a dampening of global trade could still have negative consequences
for them.”

This article was written by Justin Low at www.forexlive.com.