Spain’s Manufacturing Activity Touched an 8-Month High in January
Global Manufacturing Remained Subdued at the Start of 2016
Spain’s manufacturing PMI rose to 55.4 in January
The Spanish economy contributes about 2.0% toward global gross domestic product, and the manufacturing sector accounts for 13% of the country’s economy.
According to Markit, Spain’s manufacturing PMI (purchasing manufacturers’ index) increased to 55.4 in January, a rise of 2.4 points from December’s reading of 53.0.
Though Spanish manufacturing grew, global manufacturing remained subdued in January. As a result, the iShares MSCI Spain Capped ETF (EWP) fell 5.6% over the past month as of February 1.
Spanish ADRs (American depositary receipts) Telefónica (TEF), Grifols (GRFS), Banco Santander (SAN), and Banco Bilbao Vizcaya Argentaria (BBVA) fell 3.5%, 8.8%, 14.0%, and 11.9%, respectively, over the past month as of February 1, 2016.
Sharper rises in output and new orders
Spain’s output and new business saw solid jumps in January, mainly due to a rise in orders from both domestic and foreign clients. The backlog of work also grew with the rise in new orders.
Stocks of purchases and finished goods rose
With a growing orderbook, the rate of job creation picked up in January. Spanish manufacturers increased their purchasing activity to meet rising demand. Pre-production inventories and finished goods inventories were higher in January.
During the month, vendor performance continued to deteriorate, with shortages of stocks on the supplier end.
Input and output costs fell in January
Falling commodity prices, especially for steel, helped to keep cost inflation low. Sale prices fell as manufacturers passed the savings on to their customers.
A boost in new orders and output growth may help to revive Spain’s manufacturing activity.
The UK manufacturing PMI was recently released. We’ll cover it in the next article.
Browse this series on Market Realist:
