Spain January manufacturing PMI 50.9 vs 53.3 expected

• Prior 53.3

A stuttering start to the new year for Spain’s manufacturing sector. Both output and new orders saw softer gains while employment conditions also slumped lower in January. HCOB notes that:

“The new year is off to a weak start. The momentum in Spain’s manufacturing sector has significantly slowed at the
beginning of 2025. This is due to production heading toward stagnation, and order levels rising at a much slower rate,
following solid growth in both areas in previous months. Foreign orders also broadly stagnated in January. The surveyed
companies partly attribute this to the weakness in major Eurozone countries like Germany and France. However, this has
not dampened business expectations for the coming year. Companies remain hopeful as new projects were initiated at the
start of the new year, aiming to improve trade and output.

“Developments on the price front are causing concern. Input price inflation has accelerated for several consecutive months,
as indicated by the HCOB PMI. Nevertheless, we are still far from the high levels of input inflation observed following the
supply bottlenecks after the pandemic and the Russian invasion of Ukraine. Input price inflation is now close to its long-term
average. For the first time in several months, output prices have also risen. The higher prices can indeed be interpreted as
passing on the increased input costs to consumers.

“Concerning consumer goods, the HCOB PMI signalled a slight weakening compared to the previous month, yet growth
remains solid overall, in line with recent trends. In contrast, the intermediate and investment good sectors are both
stagnating at the beginning of the year. The general weaknesses in Europe’s key industries, such as the automotive and
machinery sectors, may now also be affecting Spain’s manufacturing industry, leading to weaker performance, particularly in
these sectors.

“After several months of substantial growth, manufacturing employment was little changed in January. Where additional staff
were needed, companies did not refuse to hire but cost pressures and restructuring efforts strained employment growth.
However, backlogs of work have been increasing for a year now. Combined with positive business sentiment, this creates a
stable environment for Spanish manufacturing employees.”

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