- Prior 51.9
Spain's manufacturing sector posts strong business activity in August, driven by improvements in output, new orders and employment. The headline reading is the highest since October last year. Of note though, the rate of inflation rose to its highest in five months but is still relatively modest when compared to historical highs. HCOB notes that:
"Spain’s manufacturing sector is sending encouraging signals: the HCOB Manufacturing PMI has risen for the fourth consecutive month, underscoring the sector’s robust trajectory since the dip at the beginning of the year. Spain thus reaffirms its leadership role in the post-pandemic economic recovery of the euro area. The country’s sustained strength could act as a catalyst for broader economic revitalization across the currency union, particularly in an environment still marked by uncertainty and fragmented demand.
"Manufacturing demand picked up in August, both domestically and abroad, as reflected in the upward trend in new orders. This momentum likely fuelled production, which has now increased for the fourth consecutive month, making a notable leap in August. The positive developments on the demand side appear to be spilling over into other subcomponents; manufacturers are expanding their workforce to keep pace with rising workloads, while stocks of finished goods continue to decline due to stronger sales. Quantity of purchases rose again in August, ending a six-month stretch of contraction, a further indication that firms are adjusting to a renewed upswing in demand.
"Sub-sector performance in manufacturing presents a heterogeneous landscape. The consumer goods sector remains directionless for a second month, whereas intermediate and investment goods are underpinning the recovery of the broader manufacturing economy. More broadly, input costs and output prices have edged up moderately, yet remain anchored within historical ranges, suggesting inflationary pressures are contained."
