Spain Manufacturing Slows in November

The HCOB Spain Manufacturing PMI edged down to 49.2 in January 2026 from 49.6 in December, below market expectations of 49.9. This was the second straight month of contraction and the weakest reading since April 2025, weighed down by an accelerated decline in new orders. New export orders declined for a fifth month amid tariffs, a stronger euro against the US dollar, and weak demand from European markets. Despite this, production remained broadly unchanged, rising only slightly, which allowed firms to continue reducing their backlogs of work. Stocks of finished goods dropped for the fourteenth month, while purchasing activity was cut for a second month. Employment also fell for the fifth month in a row. On prices, input costs rose sharply, though intense competition and weak demand limited manufacturers’ ability to pass on these higher costs to customers. Still, manufacturers retained a notably optimistic outlook for the year ahead, anticipating a potential upswing in economic growth.

The HCOB Spain Manufacturing PMI dropped to 49.6 in December 2025, down from 51.5 in the previous month and below market expectations of 51.0. This marked the sector’s first contraction since April, driven by declines in both output and new orders. Survey data indicated a deterioration in demand, particularly from international clients, with new export orders falling at the steepest pace since April due to intensified price competition. Employment continued to decline for the fourth consecutive month, with job losses reaching their sharpest level in two years. Backlogs of work also fell for the second month running, marking the largest reduction since April. On the price front, input costs fell marginally, allowing modest selling price cuts amid strong competition. Despite the slowdown, confidence rose to an 18-month high on expectations of stronger demand and order books.

The HCOB Spain Manufacturing PMI fell to 51.5 in November 2025, down from 52.1 in October and below market expectations of 52.5, signaling a softer pace of expansion in the sector. Despite the slowdown, the reading marks seven consecutive months of growth. Output and new orders increased at a slower rate, with demand driven mainly by the domestic market, as new export orders declined for a third straight month. Employment levels remained largely unchanged, while purchasing activity picked up. On the price front, output charges were reduced for the third consecutive month, as firms offered discounts despite a slight rise in input costs, reflecting competitive pressures. Business confidence stayed positive, with firms anticipating new product launches and increased marketing efforts over the next 12 months.