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Spain: Manufacturing PMI remains broadly stable in April

May 4, 2015

The Markit Spain Manufacturing Purchasing Managers’ Index (PMI) remained broadly stable in April, falling slightly from 54.3 in March to 54.2. As a result, the index is resting slightly closer to the 50-threshold that separates expansion from contraction in the manufacturing sector.

According to Markit, expansions were recorded in both new orders and output, illustrating improving demand. New export orders rose as well in April, increasing at the fasted pace in five months. In addition, employment increased in April, although at a slightly weaker pace than in March. Input costs increased in April, largely on the back of a weak euro driving up the price of imports. However, despite the rise in input costs, firms lowered their output prices. Markit analysts added that, “[m]omentum was maintained in the Spanish manufacturing sector in April, according to the latest PMI figures. Strong rises in workloads continued to impart capacity pressure on firms, resulting in further solid job creation. The cost inflationary impacts of the weakness of the euro – and by extension the QE programme – are starting to be felt, with manufacturers highlighting rising prices for imports as the main factor driving cost inflation. Firms have largely been unable to pass on these increases to clients, however, amid competitive pressures.”

Both the Central Bank and the government expect the economy to grow 2.0% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to expand 2.5% in 2015, which is up 0.2 percentage points from last month’s forecast. In 2016, panelists expect the economy to increase 2.3%.


Author: Angela Bouzanis, Senior Economist

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Spain PMI Manufacturing April 2015

Note: Markit Spain Purchasing Managers’ Index Composite Output Index. A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Markit.


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