Spanish Manufacturing Stabilises in February as PMI Hits 50

The manufacturing sector in Spain reached a point of stabilization in February, ending a two-month period of contraction. According to the latest HCOB Purchasing Managers Index (PMI) data, the headline figure rose to 50.0 from a nine-month low of 49.2 in January. This neutral reading suggests that while the industry has stopped shrinking, it is currently experiencing stagnation rather than a robust recovery. Despite the overall stabilization, demand for Spanish goods remained weak. New orders declined for the third consecutive month, although the rate of contraction slowed. Manufacturers faced significant headwinds in international markets, particularly due to trade policies in the United States. Firms noted that tariffs and unfavorable exchange rates continue to hamper export performance. > The current headline PMI reading of 50 signals stagnation, suggesting that the manufacturing sector entered this winter with less momentum. Operating conditions were further complicated by rising expenses. Input prices climbed to a 13-month high, driven largely by the increasing cost of raw materials. Companies such as Daiki Aluminium Industry Co., Ltd. and Steel Dynamics, Inc. operate in sectors where price fluctuations for aluminum and steel significantly impact manufacturing overheads. Consequently, factory gate prices saw their first increase since August 2025, as firms began passing some of these costs onto consumers. The labor market within the sector continued to soften, with employment levels falling for the sixth straight month. However, the pace of job shedding was the most moderate seen in the last quarter. Looking ahead, business sentiment remains positive. Many manufacturers expressed optimism regarding future demand and are planning investments to expand into new export markets as they look beyond the current period of stagnation.