Spain February manufacturing PMI 50.0 vs 50.1 expected

That's a slight improvement to the January estimate, as production levels were seen broadly stable in February. That being said, the order books declined for a third straight month albeit at a slower rate at least. On the price front, Spanish manufacturers saw another steep rise in input prices with the rate of inflation edging up from the start of the year to a 13-month high. So, that's something to be wary about.

HCOB notes that:

“Spain’s manufacturing sector continues to struggle to gain traction. Following two slight declines in December and January, the current headline PMI reading of 50 signals stagnation, suggesting that the manufacturing sector entered this winter with less momentum than during large parts of the previous year. This becomes particularly evident when looking at the demand‑related sub‑indices: production is softening, orders are declining, and foreign markets have not provided any stimulus for several months. Companies attribute the latter largely to the effects of the U.S. trade shock and the strong euro.

“It appears as if the weakness observed in Germany, France, and Italy over the past two to three years is now beginning to reach Spain’s industrial sector as well. A sector that had until now displayed considerably more resilience thanks to broad energy diversification and relatively low dependence on the United States.

“Muted market conditions are also reducing overall workloads for employees. Due to weaker sales conditions and lower production requirements, firms have increasingly refrained from replacing departing staff. Hiring willingness has now been declining for six consecutive months.

“In terms of price dynamics, the Spanish manufacturing sector shows signs of normalisation. Input prices have risen amid higher costs for various raw materials. Firms appear to have passed these cost increases on to customers through their output prices. Both price indices, however, have for some time been stabilising around their historical average levels.”