MADRID, Feb 2 (Reuters) – Spain’s manufacturing sector began the year on a weak note, with new orders falling at their fastest rate in nine months despite a stabilisation in production, a survey showed on Monday.
The HCOB Spain Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 49.2 in January from 49.6 in December, remaining below the 50 mark that indicates growth in activity.
The decline in new orders was driven by hesitancy among clients, both domestically and internationally, amid ongoing global uncertainties.
Export orders fell for the fifth consecutive month, with the steepest contraction since last April, as tariffs and a high euro to U.S. dollar rate weighed on sales.
“Spain’s manufacturing sector has entered the new year on a weak footing,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. “The deterioration in demand conditions is becoming increasingly concerning.”
Employment continued to decline for the fifth month in a row as firms responded to weaker order books and intensified cost pressures.
Input prices saw a marked increase, with inflation reaching its highest level in a year, driven by rising costs for raw materials like aluminium and copper.
However, competitive pressures limited manufacturers’ ability to pass these costs on to customers, leading to a fifth consecutive month of output price cuts.
Despite the subdued start, Spanish manufacturers remain optimistic about the year ahead, expecting stable demand and growth in sales volumes, supported by investment plans and new product launches.
But external challenges – such as intense competition and geopolitical uncertainties – continue to pose risks to the sector’s recovery.
(Reporting by David Latona; Editing by Toby Chopra)
