2026.08.0307:29:58UTC+00Spain Manufacturing Activity Remains Subdued

The S&P Spain Manufacturing PMI edged up to 50.2 in July 2026 from 49.7 in June, moving just above the 50.0 threshold that separates contraction from expansion. The improvement was modest, however, and overall sector performance remained subdued, with both output and new orders still declining.

Ongoing disruptions linked to the Middle East conflict continued to weigh on the sector, leading to persistent shipping delays, supply chain bottlenecks, and elevated energy and transport costs. Even so, both input and output price inflation eased, falling to their lowest levels in five months.

In the face of weak market demand, manufacturers ran down existing stocks of inputs and finished goods and scaled back purchasing activity at the steepest pace in more than a year. Employment levels dipped again, marking an eleventh consecutive month of marginal job losses, as firms chose not to replace departing staff and remained cautious about new hiring.

Despite the challenging conditions, overall business confidence strengthened, rising to its highest level since February. The rebound in sentiment was underpinned by long-term growth strategies and expectations of an eventual recovery in market conditions.