Spain manufacturing activity stable in August, but job growth stalls

 

Spain's manufacturing growth was stuck at its slowest pace in more than two years in August and manufacturing employment grew at its slowest rate in 27 months, a survey showed on Thursday.

Markit's Purchasing Managers' Index (PMI) of manufacturing companies stood at 51.0 in August, unchanged from July. However, that was the 33rd straight month the index came in above 50, which separates growth in activity from contraction.

New orders perked up in August after a contraction in July, rising to 50.4 from 48.1.

"The sector therefore looks to be in broadly stagnant mode at present, with manufacturers hoping to see some meaningful order growth before the end of the year to reinvigorate the sector," Markit economist Andrew Harker said.

The index for manufacturers' employment showed a sharp drop to 50.3 in August from 53.4 in July, a worrying sign. Spain continues to struggle with one of the highest unemployment rates in the euro zone despite strong growth.

The economy mostly has been immune to an eight-month political deadlock that has cast uncertainty over the country's future, but analysts fear that could change if an administration is not put in place soon.

Recommended Reading :

* Spanish retail sales rise 4.9% on year in July

* Spain poised to grow 2.9% in 2016