Spanish manufacturers report worst conditions in six years
Majority of factory executives in key poll see contraction in output
Spanish manufacturers reported tumbling orders and falling output as the eurozone economy continues to be hit by global trade angst and weakening growth.
The closely watched IHS Markit purchasing managers’ index fell to 47.9 in June, down from 50.1 in May. The figure was lower than the 49.5 forecast in a Reuters poll. A reading below 50 indicates a majority of companies reported falling output.
“Spain’s manufacturing sector entered into contraction territory during June, with the respective PMI reaching its lowest level in over six years” said Paul Smith, economics director at IHS Markit. “The sector is being buffeted by a challenging economic environment, characterised by ongoing global trade tensions and political uncertainties”.
This was the first reading below 50 in more than five years. The report said output was down due to “tumbling volumes of incoming new work”.
The Spanish economy has outperformed the average of the eurozone for the last four years and it continues to do so partially because of its lower reliance on an export-led manufacturing sector than other major economies such as Germany or Italy.