Spain Manufacturing Grows Most Since Early 2022- PMI Survey

(RTTNews) - Spain's factory sector expanded at the fastest pace in over two-an-a-half years in October, driven by significant growth in output and new orders amid an improvement in market demand, results of the latest purchasing managers' survey by S&P Global showed on Monday. The HCOB Spain manufacturing purchasing managers' index rose to 54.5 from 53.0 in September, surpassing the 53.1 reading economists had expected. The latest reading was the strongest since February 2022.

A PMI reading above 50 suggested growth in the Spanish manufacturing sector for a ninth consecutive month.

The recent PMI survey was carried out between October 10-24.

Export orders grew at the fastest rate in nearly three years. Buying activity and employment increased in October in response to the growing business.

Input cost inflation remained modest partly due to the slight reduction in crude oil prices in October, while output costs declined for a second month in a row.

Ongoing capacity constraints continued to pressure manufacturers and backlogs were depleted at the steepest rate since May and at an above average pace.

"The high demand in Spain's manufacturing sector cannot be met in full, leading to an accumulation of backlogs," Jonas Feldhusen, an economist at Hamburg Commercial Bank, said.

"For Spanish workers, this is promising news, as reducing these backlogs and meeting the uptick in orders requires additional hiring. Companies are also attempting to bolster their stocks of intermediate goods to keep pace with heightened production demands."

Business confidence climbed to the highest level since May as firms expect an improvement in sales and the economic climate over the coming year.

"Manufacturing companies are looking to grow their workforces, and there is optimism for a stable economic environment, supported by the ECB's easing measures," Feldhusen said.

"However, global downside risks persist, such as the upcoming U.S. election with unfavorable obstacles for trade and potential further escalations in the Middle East through potentially rising oil prices."