Spanish Manufacturing Activity in August

MADRID (Reuters) – Spanish manufacturing activity grew for a seventh consecutive month in August, though at the slowest pace in all those months. Business confidence was at its lowest so far this year, according to a survey released on Monday.

The HCOB Purchasing Managers’ Index (PMI) for Spain’s manufacturing sector, compiled by S&P Global, stood at 50.5 in August, down from 51.0 in July and 52.3 in June. This marks the seventh consecutive reading above the 50 level that separates growth from contraction.

Despite a slight expansion in activity, output during the month shrank, employment fell, and confidence in the outlook hit its lowest point this year amid concerns that demand growth from European markets will weaken, S&P Global noted in its monthly report.

Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, commented, “The recent three-month trajectory clearly indicates a move toward stagnation.”

This slowdown is consistent with trends in the rest of Europe, he added.

Spain’s statistics department recently reported the economy expanded at a faster than expected 0.8% in the second quarter.

The government anticipates gross domestic product (GDP) will expand 2.4% this year, while the central bank predicts 2.3% growth, significantly faster than projections for other large eurozone economies such as France, Germany, or Italy.