Spain’s manufacturing growth slows as supply delays intensify, PMI shows

A worker walks between tanks filled with olive oil at the Spanish olive oil producer Dcoop’s factory in Antequera, Spain, April 9, 2025. REUTERS/Jon Nazca Purchase Licensing Rights , opens new tab

MADRID, June 1 (Reuters) – Spain’s manufacturing sector expanded modestly in May, at a slightly slower pace than in April, as disruptions linked to the Middle ​East conflict worsened supply delays, raised costs and weighed on ‌demand, a business survey showed on Monday.

In the survey by S&P Global, the country’s Manufacturing Purchasing Managers’ Index (PMI) fell to 51.2 in May from 51.7 in April. The ​50-mark separates growth from contraction.

“May indicated a partial reversal of ​last month’s safety stock-driven manufacturing sector growth,” said Paul Smith, ⁠Economics Director at S&P Global Market Intelligence.

“This was linked to the dual ​forces of elevated prices and ongoing uncertainty, which were seen by manufacturers ​as negatively impacting client budgets and resulting in a drop in their sales over the month,” Smith added.

Output rose for a second month, but only marginally and at ​a weaker pace than in April. Respondents linked the slowdown to ​weaker incoming demand after new orders fell for the fifth time in six months.

Export ‌demand also ⁠remained under pressure. New export orders declined for a ninth straight month, although the rate of contraction was the weakest since February.

The pace of job cuts was marginal and the weakest since February.

Supply strains intensified sharply. ​Vendor performance deteriorated ​to the greatest ⁠extent in four years, while input price inflation hit a four-year high.

Confidence improved to a three-month high from ​March’s near two-and-a-half-year low, but remained below its historical ​average as ⁠firms cited geopolitical uncertainty, weak demand and the risk of further price rises.

The government expects the Spanish economy, which is among the top performers in ⁠Europe, ​to expand 2.2% this year after 2.8% ​in 2025, although it has acknowledged that the war in the Middle East could weigh on ​the forecast.

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