Spain Pmi Shrinks Further In September

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Spain Pmi Shrinks Further In September

Spain's PMI Shrinks Further In September

During the month of September, Spain's factory activity shrunk once again, making it the 6th consecutive month. According to experts, the high prices and the market conditions have negatively impacted the manufacturers.

As a result of this, the manufacturing sector has introduced job cuts, which has resulted in the worsening of the jobs market. Overall, the manufacturing sector of Spain is going through a tough time, which can be partially attributed to the high-interest rates set by the ECB.

The PMI index (HCOB) from S&P Global reveals that things took a turn for the worse during August. In July, the HCOB PMI was 47.8, which moved down to 46.5 during August. So, in a sense, the contraction in Spain's manufacturing sector continues to intensify further with each passing month.

Decline In New Orders And Output

Overall, a decline in the new orders and output was witnessed during September. According to experts, the uncertainty in the market and the high prices are the main reasons behind this contraction.

To survive in these tough times, Spanish companies have resorted to job cuts in an attempt to keep the financials in check. That's the third month that the factories continue to shrink their manpower.

On the other hand, the services sector of Spain is also going through the same downturn as well. To give you some perspective, the services sector also recorded a contraction, which is the first such event in the last 10 months.

Both of these readings do not paint a very good picture of Spain's economy. According to the Spanish government's forecast, a GDP growth of 2.1% is expected in the year 2023.

Just a week ago, the Spanish authorities revised the growth during Q2 to around 0.5%, while the earlier value was 0.4%. Similarly, the Q1 GDP was revised from 0.5% to 0.6% as well.

For now, it remains to be seen whether Spain will even manage to achieve a 2.1% GDP growth or even that will become an impossible feat.

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