Spain: Manufacturing PMI disappoints in July, easing to 51, its lowest level in six months

He HCOB manufacturing PMI for Spain has shown a moderation of 1.3 points in July, standing at 51 compared to 52.3 in June, its lowest level in six months. The figure disappoints market expectations, which had expected an increase of two-tenths to 52.5 points, although the indicator has remained in expansion territory since last February.

According to the HCOB statement, output is rising again, but at a slower pace as orders decline. Cost inflation has eased, although output prices are rising at a firmer pace. Employment figures are rising again while the outlook remains optimistic.

Jonas Feldhusen, Junior Economist at Hamburg Commercial Bankcommented on the PMI data: “It seems that the wind in the Spanish manufacturing sector is changing: headwinds are increasing. Like the preliminary Eurozone PMI, The trend in the Spanish manufacturing sector is also deteriorating. Although the index still indicates marginal growth at 51.0 points, the trend has clearly been towards stagnation since May. Overall demand registered a slight decline in July for the first time this year, and external demand is also losing some momentum. This trend is affecting purchasing activity, which is declining for the first time since January.

Euro reaction

The EUR/USD has fallen following the release of the PMIs from France and Spain, which have come in below expectations. The pair has fallen to daily lows at 1.0802where it is now operating, falling 0.22% daily.