Spain Private Sector Shrinks for 1st Time in Nearly 2-1/2-Years

The HCOB Spain Composite PMI fell to 48.7 in April 2026 from 52.4 in March, signalling the first contraction in the country's private sector since November 2023. The downturn was driven by the services sector, while manufacturing output continued to expand solidly. New orders declined as demand softened amid widespread uncertainty linked to the conflict in the Middle East, alongside growing concerns about inflationary pressures. Latest data showed historically sharp increases in both input and output prices. On the other hand, employment increased solidly, while confidence in the outlook was broadly unchanged.

The S&P Global Spain Composite PMI rose to 52.4 in March 2026 from 51.5 in February, signaling continued expansion in private sector activity. Growth was driven mainly by the services sector, as manufacturing output declined for a second consecutive month. Similar patterns were observed in new orders and employment, with services offsetting weakness in industry. Meanwhile, input cost inflation accelerated sharply, largely due to higher energy and fuel prices linked to the Middle East conflict. As a result, business confidence weakened significantly, falling to its lowest level since late 2022.

The HCOB Spain Composite PMI fell to 51.5 in February 2026 from 52.9 in January, signaling the slowest expansion in Spain’s private sector since May 2025. The slowdown was driven by weaker momentum in the services sector and a renewed contraction in manufacturing output. Similar patterns emerged in both new orders and employment, with growth moderating across services and declining in manufacturing. Meanwhile, inflationary pressures intensified. Firms reported faster increases in both input costs and output prices, pointing to a pickup in private sector inflation. Business confidence also weakened, with expectations for future activity slipping to a six-month low.