Spain July manufacturing PMI 51.0 vs 52.5 expected

• Prior 52.3

A sign of change for the Spanish manufacturing sector? Perhaps. Output was higher on the month but orders declined, leading to just a marginal growth in July. But at least employment conditions are holding up well and the outlook remains fairly optimistic. HCOB notes that:

“The wind in Spain’s manufacturing sector appears to be shifting – headwinds are picking up. Similar to the Flash PMI of the
Eurozone, the trend in Spain’s manufacturing sector is also deteriorating. Although the index still indicates marginal growth
with 51.0 points, the trend has clearly been moving towards stagnation since May. Overall demand saw a slight decline in
July for the first time this year, and foreign demand is also losing some momentum. This trend is weighing on purchasing
activity, which is declining for the first time since January. Companies are now focusing on utilizing existing resources in
production and slightly reducing their inventory of purchases. At first glance, the increased suppliers’ delivery times seem out
of place. These are still due to shipping delays caused by the avoidance of the Suez Canal and the Red Sea, as panellists
reported by anecdotical evidence.

“It is encouraging that companies are still hiring new personnel. However, this insight should be taken with caution, as the
hiring pace is steadily decreasing, corresponding to the overall declining trend. The slowdown in growth momentum is
widespread and spans all subsectors. This aligns with expectations, which have fallen to the lowest level of the year and
below the historical average.

“High input prices remain a problem for Spanish manufacturing companies. As in the previous month, high prices for raw
materials, particularly metals, as well as transportation, are cited. However, the momentum has slightly weakened compared
to the previous month. Companies are increasingly managing to pass on input prices to consumers.”

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