- Prior 49.6
This marks another marginal decline in Spain's manufacturing activity, with the steepest decline in new orders for nine months seen. That was led in part by an accelerated downturn in export volumes. But overall, at least output conditions are seen stabilising on the month.
Besides that, cost pressures were seen intensifying with cuts to purchasing, inventories and employment seen across the board. Trouble up ahead? HCOB notes that:
“Spain’s manufacturing sector has entered the new year on a weak footing. December’s disappointing PMI figures had already raised the question of whether the downturn was merely a temporary setback or the beginning of a more persistent soft patch. The January data now suggests that the latter is more likely. Although production has stabilised, the deterioration in demand conditions is becoming increasingly concerning. Both domestic and foreign new orders declined further, despite already subdued levels. Notably, many panellists attribute the softer demand environment to ongoing global uncertainty, a factor that already weighs heavily on manufacturers in Germany, France, and Italy throughout the past years.
“Subdued sentiment is also becoming more visible in employment trends. For the fifth consecutive month, the employment index remained below the growth threshold. As order books weaken, firms are running down their backlogs at an accelerated pace. At the same time, cost pressures have intensified as this month’s prices for key inputs, such as aluminium and copper, rose again. Yet heightened competition and muted demand are limiting manufacturers’ ability to pass on these higher costs. Unsurprisingly, this combination of rising input costs and waning pricing power is dampening companies’ willingness to hire.
“Despite the loss of momentum, Spanish manufacturers retain a notably upbeat view of the year ahead. Many manufacturers continue to anticipate stable demand throughout 2026 and are confident that ongoing investments and newly launched projects will pay off. However, external challenges persist. Intense competition from outside Europe and the continued entanglement of geopolitical and trade-related uncertainties - most recently exemplified by developments surrounding Greenland - are prompting clients to delay investment decisions.”
