- Prior 53.0
Spain continues to be the shining light for Europe and is a contrast to Germany. Looking at the details here, both production and new orders both rose sharply, which encouraged greater purchasing and recruitment activity amongst firms. HCOB notes that:
"It was a strong start to the final quarter for Spain's manufacturing sector. After a notable slowdown in growth throughout the summer, as indicated by our PMI data, Spain's manufacturing sector saw a marked resurgence in both September and October. The index has shown further improvement, with an impressive rise to 54.5 points, indicating accelerated monthly growth. Survey respondents reported increased demand, which is reflected in stronger order books, driving companies to ramp up production.
"While production levels and order volumes are both on the rise, capacity constraints remain. The high demand in Spain’s manufacturing sector cannot be met in full, leading to an accumulation of backlogs. 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.
"On the price front, no significant shifts have been observed in Spain’s manufacturing sector. Input prices have moderately increased according to companies, while output prices have declined for the second consecutive month. The drop in prices charged is attributed to slowing input price momentum, fitting well with a slight reduction in crude oil prices seen in October.
"All manufacturing’ subsectors are expanding in October. The intermediate goods sector has shown the most robust growth, with significant increases in both production and order volumes. The investment and consumer goods sectors are also experiencing higher production rates, with all three sectors actively seeking new employees.
"The outlook has slightly improved, thanks to the strengthening production levels and healthier order books. Manufacturing companies are looking to grow their workforces, and there is optimism for a stable economic environment, supported by the ECB's easing measures. However, global downside risks persist, such as the upcoming U.S. election with unfavourable obstacles for trade and potential further escalations in the Middle East through potentially rising oil prices."