Spanish manufacturing grows in April at fastest rate this century

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Spanish factory activity recorded its strongest monthly growth in 21 years in April, a survey showed on Monday, with demand, output and employment all on the rise as economies around the world gradually reopen in the wake of the COVID-19 pandemic.

IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing rose to 57.7 last month from 56.9 in March, the highest rate since December 1999. Figures above the 50.0 mark indicate expansions in activity.

“Spain’s manufacturing sector continued to boom during April, with output and new orders again recording stellar gains, albeit at slightly slower rates than in March,” said Paul Smith, an economist at IHS Markit.

“With demand strengthening and expected to continue to do so in the months ahead as economies reopen further, any challenges for the sector are predominately stemming from the supply-side,” he added, pointing to high price pressures as a “less positive” effect.

Spain’s economy shrank 0.5% in the first quarter, when growth was zero, preliminary data showed on Friday, as restrictions to curb a third wave of coronavirus stifled activity mainly in the services sector.

The government expects the economy to grow 6.5% this year after 2020’s record 10.8% contraction.

Photo: file photo by EPA/KIKO HUESCA