MADRID (Reuters) – Factory activity in Spain shrank again in September as market conditions and high prices weighed on manufacturers, who also shed jobs as a result, a survey showed on Monday.
The HCOB Purchasing Managers’ Index (PMI) for Spanish manufacturing compiled by S&P Global was 47.7 in September, from 46.5 in August and 47.8 in July, marking its sixth consecutive month below the 50 mark denoting growth in activity.
“Output and new orders both registered declines during September,” S&P Global said in the survey report. “Firms widely commented on widespread market uncertainty and that high prices were having a negative impact on demand.”
As a result, the survey showed, companies reduced staffing at their plants for the third month in four, the report said.
The weakness in the manufacturing sector was last month matched by a downturn in the bigger services sector, which contracted for the first time in 10 months.
The data do not bode well for the overall economy, which is expected by the government to grow 2.1% this year.
Last week, the statistics institute revised up second quarter growth to 0.5% from an initial 0.4% and first quarter growth to 0.6% from an earlier 0.5%. The central bank expects to see a further slowdown to 0.3% growth in the third quarter.
The Spanish government is forecasting economic growth of 2.1% for 2023, down from 5.8% in 2022 and 6.4% in 2021.
(Reporting by Inti Landauro; Editing by Hugh Lawson)
