Spain showed “resilience” in an otherwise weak European manufacturing sector, an industry expert has noted, as the country’s purchasing managers index improved in December.
“While other European countries grapple with severe crisis consequences such as mass layoffs, factory closures, and a collapse in investments, Spain is experiencing growth in its manufacturing sector,” Jonas Feldhusen, junior economist at Hamburg Commercial Bank, commented. “This can be attributed to its broad energy supply and relatively low export dependence on China.
“In 2024, Spain’s industrial production is expected to have increased overall, in contrast to the major other countries in the eurozone.”
Purchasing Managers’ Index
Feldhusen was commenting as the headline HCOB Spain Manufacturing Purchasing Managers’ Index (PMI) improved to 53.3 in December, up from 53.1 in November and close to the 32-month high recorded in October.
Spain’s PMI has now posted above 50.0 for 11 successive months, the data, produced in association with S&P Global, found.
Growth in PMI was supported by a strong demand environment, both domestically and internationally, the data showed, with export orders increasing significantly, and strong sales across key markets, including Europe and North Africa.
The expansion in new orders prompted firms to scale up production and increase their buying activity, despite ongoing supply chain disruptions caused by flooding in the Valencia region.
‘Strong order situation’
“The production in Spain’s manufacturing sector is booming thanks to a strong order situation, which has been growing for five months. Foreign orders also support demand,” Feldhusen added. “To manage the additional production, companies are still seeking new workers. A growing backlog of work is therefore not surprising.”
Sentiment in Spain’s manufacturing sector also improved in December, with optimism about future economic conditions strengthening for the fourth month in a row. Confidence was bolstered by expectations of improved macroeconomic conditions in the coming year and the potential for new product launches.
This optimism is reflected in the positive outlook for manufacturing, as Spanish companies anticipate a continued increase in sales and production throughout 2025.
“The outlook remains extremely interesting. Spanish industrial companies are currently quite optimistic, according to the HCOB PMI survey,” Feldhusen added. “However, weakness in Europe, as the most important sales market, is expected to persist in 2025. Additionally, the new US administration’s tariffs will cause global disruptions.
“Although Spanish exporters are less dependent on exports to the USA than other European countries, a dampening of global trade could still have negative consequences for them.” Read more here.
