Spain‘s manufacturing sector reported a slight decline in performance in August, due to rising energy prices, new data from S&P Global has found.
The S&P Global Spain Manufacturing PMI fell to 49.5 in August, from 50.2 in July, as output and new orders both declined. The period also saw a decline in employment in Spain’s manufacturing sector, while confidence about the future ‘softened’.
The PMI is now at its lowest reading since March, having recorded its second deterioration in the past three months.
‘Somewhat challenging’
“August proved to be a somewhat challenging month for Spain’s manufacturing sector, with output and new orders declining on the month amid stagnant market demand,” commented Paul Smith, economics director at S&P Global Market Intelligence.
“Weakness was especially prevalent amongst capital goods producers as firms continue to struggle to secure investment and commitments to new contracts given the uncertainty that exists within the marketplace.”
According to S&P Global, manufacturing output fell at its fastest rate since the end of 2023, with businesses linking the decline primarily to weaker new work and stagnant market conditions. Both domestic and international sales decreased, with tariffs contributing to weaker export demand.
However, the decline in new export orders was marginal and was the weakest since November 2025.
Employment also declined for the twelfth consecutive month, while companies reduced purchasing activity for a ninth successive month.
The rate of contraction in purchasing was the steepest since April 2025, reflecting lower production and new orders. Manufacturers also relied more heavily on existing inventories, with stocks of finished goods recording their steepest decline since April and stocks of purchases falling for an eleventh consecutive month.
Supply chain disruption
Supply-chain disruption remained a concern, S&P Global’s data showed. Average supplier delivery times lengthened considerably, despite the deterioration being the least marked since February. Firms continued to report an ‘adverse impact’ to shipping routes linked to the conflict in the Middle East, while suppliers faced difficulties sourcing inventories.
“With energy costs picking up again in August, input price inflation has once again surged higher, placing noticeable pressure on margins and meaning confidence in the outlook remained subdued.” Smith added. “No wonder firms remained reticent to hire or buy-in new inputs, with both employment and purchasing activity subsequently cut over the month.” Read more here.
