Spain's August manufacturing PMI drops to 49.5, entering contraction

• Spain's manufacturing PMI for August came in at 49.5, below the 50.3 forecast.
• The previous reading was 50.2.

August painted a bleak picture for Spanish manufacturing as output and new orders fell. The deterioration in business activity was tied to worries about climbing prices, notably for energy, and the latest figures indicate a marked pickup in overall input cost inflation.

Supply-side issues persisted as well, with input delivery times worsening significantly once again.

The production decline is partly attributable to normal seasonal summer factory closures. However, according to the survey, panellists mainly attributed the drop to a slight decrease in new work, citing stagnant market conditions and demand.

S&P Global said:

“August proved to be a somewhat challenging month for Spain’s manufacturing sector, with output and new orders declining on the month amid stagnant market demand. Weakness was especially prevalent amongst capital goods producers as firms continue to struggle to secure investment and commitments to new contracts given the uncertainty that exists within the marketplace.

“This uncertainty can be linked to the rollercoaster in price setting that firms continue to experience in 2026. With energy costs picking up again in August, input price inflation has once again surged higher, placing noticeable pressure on margins and meaning confidence in the outlook remained subdued. No wonder firms remained reticent to hire or buy-in new inputs, with both employment and purchasing activity subsequently cut over the month.”