Spain May manufacturing PMI 54.0 vs 52.6 expected

• Prior 52.2

Accelerated gains in both output and new orders sees Spain manufacturing PMI record a 26-month high reading. The only downside was that there was evidence of a pick-up in inflationary pressures during May. HCOB notes that:

“Spain’s manufacturing sector has been improving continuously in 2024. In May, both incoming orders and production grew
at an accelerated pace once again. The improvement in demand, which primarily came from the domestic market, pushed
the HCOB PMI to a more than two-year high with an index value of 54.0. The economic upturn was mainly driven by the
continued strong demand in the domestic market. Although export orders also recorded growth, this lagged behind the
overall development of the order situation. In the regions where exports increased, Asia, Europe, and South America were
identified as key drivers of sales growth.

“Spanish manufacturers are employing more staff. They responded to the increased production demand by significantly
expanding purchasing activities and solidly increasing their workforce. This was evidenced by the fourth consecutive month
of employment growth, although it failed to prevent a rise in backlogs of work. Current data shows that the backlogs of work
increased at the fastest rate since the beginning of 2022.

“The price pressure in Spain’s manufacturing sector has resurged drastically in May. Input costs rose for the fourth month in
a row, with surveyed companies particularly pointing to higher raw material prices. Although input costs were higher,
companies were able to pass these additional costs onto end consumers, leading to the first rise in output prices for 14
months.

“Growth extends across all areas of the manufacturing sector. Particularly noteworthy is the intermediate goods sector,
which positively surprised with a significant improvement in production and order levels. The investment goods sector also
experienced accelerated growth. However, growth in the consumer goods sector, which had been the most stable in recent
months, is slowing somewhat due to rising cost pressures.”

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