Spain factory activity slows but remains positive in January

The HCOB Spain Manufacturing PMI declined to 50.9 in January 2025, down from 53.3 in December and missing market expectations, indicating the slowest manufacturing growth since August.

Spain factory activity slows but remains positive in January

The slowdown was largely attributed to weaker gains in output and new orders, as domestic and international demand softened. Export sales edged up only marginally, with firms reporting subdued orders from key European and Latin American markets. Employment growth stalled, reflecting business caution amid rising operational costs and persistent uncertainties in the global economic outlook. On the price front, input cost inflation accelerated to its highest level since July, driven primarily by rising steel and transport costs. This prompted manufacturers to raise output prices for the first time in five months, in an effort to protect margins.

Business confidence remains steady

Despite the moderation in growth, business confidence remained steady at December’s seven-month high, with firms optimistic about organic expansion, new commercial activities, and investment plans. However, supply chain disruptions continued to pose challenges, as businesses reported longer supplier delivery times and stock shortages, which added to production constraints. Looking ahead, manufacturers remain watchful of potential headwinds, including geopolitical uncertainties, evolving trade conditions, and inflationary pressures. Nevertheless, optimism persists as firms anticipate increased demand and strategic investments to drive future growth.