CdM | The Spanish manufacturing sector extended its growth trajectory in November, albeit at a slightly slower pace, according to the PMI index. Therefore, ‘Spain appears to be converging with the dynamics of the eurozone as a whole’.
Specifically, the seasonally adjusted PMI index for the Spanish manufacturing sector stood at 51.5 in November. This figure was lower than the 52.1 recorded in October and therefore indicates a slower pace of growth. However, by remaining above the no-change level of 50, the latest reading extended the current period of expansion to seven months.
As Hamburg Commercial Bank explains, ‘the weakening of international trade appears to be negatively affecting Spanish manufacturing. Over the last six months, new domestic orders have risen steadily, while export orders have fallen in four of these six months, with the respective index falling below the growth threshold.’
‘Respondents corroborate this trend with anecdotal evidence, highlighting weaker international demand. This imbalance has intensified competition for sales, leading companies to cut prices,’ they add.
Furthermore, “interestingly, manufacturers reduced their workforces for the third consecutive month, although operating conditions remained generally favourable. Net job losses also contrast with increased purchasing activity, suggesting efforts to maintain production rates and order volumes. Caution around hiring reflects the fragile macroeconomic environment, characterised by weak economic growth in Europe and competitive pressure from China, as well as trade barriers and geopolitical tensions.”
However, they note that “Spanish manufacturers are optimistic about their future production, as business expectations remained stable, slightly above the long-term average.
