MADRID (Reuters) – Spain’s manufacturing sector grew more slowly in November, hampered by severe flooding in the east coast region of Valencia, a survey showed on Monday, although confidence in future growth remained strong.
HCOB Spain’s manufacturing purchasing managers’ index (PMI), compiled by S&P Global, fell to 53.1 in November from 54.5 in October, marking the tenth consecutive month above the 50.0 threshold that indicates rising activity.
The decline is partly attributed to the deadliest floods in the country’s modern history, which killed more than 200 people on October 29 and 30.
Despite the slowdown, production and new orders continued to grow, supported by strong export demand, especially from neighboring European countries. New export orders grew at the fastest rate since September 2021.
“The Spanish manufacturing sector continued its expansion in November – albeit at a slower pace and despite fatal floods in the Valencia region,” Jonas Feldhusen, junior economist at Hamburg Commercial Bank, said in a monthly S&P report.
Employment in the sector rose for the third month in a row, driven by higher workloads and production restrictions.
Input cost inflation accelerated but remained modest, with businesses citing higher prices for raw materials, especially metals. Despite this, competitive pressures kept production fees slightly low for the third consecutive month.
Confidence in the outlook improved, reaching its highest level since May, as companies expected a more stable global economic environment and positive results from planned commercial actions.
PMI data for November appeared to show that the strong economic growth seen in the third quarter continued into the next quarter.
Spain’s statistics department said on Wednesday that the economy grew faster than expected in the third quarter, by 0.8 percent, compared with 0.4 percent for the eurozone as a whole, with annual growth of 3.4 percent.
The government recently increased its growth forecast for 2024 to 2.7%.
