Finance
Spain's Manufacturing Sector Faces Rough Start to 2026, PMI Shows
Published by Global Banking & Finance Review®
Posted on February 2, 2026
2 min readLast updated: February 2, 2026
Quick Summary
Spain's manufacturing sector faces a challenging start to 2026 with declining new orders and rising input prices, according to the latest PMI report.
Spain's Manufacturing Sector Struggles at Start of 2026, PMI Indicates
Overview of Spain's Manufacturing Sector
MADRID, Feb 2 (Reuters) - Spain's manufacturing sector began the year on a weak note, with new orders falling at their fastest rate in nine months despite a stabilisation in production, a survey showed on Monday.
Decline in New Orders
The HCOB Spain Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, dropped to 49.2 in January from 49.6 in December, remaining below the 50 mark that indicates growth in activity.
Employment Trends
The decline in new orders was driven by hesitancy among clients, both domestically and internationally, amid ongoing global uncertainties.
Input Prices and Inflation
Export orders fell for the fifth consecutive month, with the steepest contraction since last April, as tariffs and a high euro to U.S. dollar rate weighed on sales.
Future Outlook
"Spain's manufacturing sector has entered the new year on a weak footing," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. "The deterioration in demand conditions is becoming increasingly concerning."
Employment continued to decline for the fifth month in a row as firms responded to weaker order books and intensified cost pressures.
Input prices saw a marked increase, with inflation reaching its highest level in a year, driven by rising costs for raw materials like aluminium and copper.
However, competitive pressures limited manufacturers' ability to pass these costs on to customers, leading to a fifth consecutive month of output price cuts.
Despite the subdued start, Spanish manufacturers remain optimistic about the year ahead, expecting stable demand and growth in sales volumes, supported by investment plans and new product launches.
But external challenges - such as intense competition and geopolitical uncertainties - continue to pose risks to the sector's recovery.
(Reporting by David Latona; Editing by Toby Chopra)
Key Takeaways
- •PMI for Spain's manufacturing fell to 49.2 in January.
- •New orders declined at the fastest rate in nine months.
- •Export orders fell for the fifth consecutive month.
- •Input prices increased, driven by raw material costs.
- •Manufacturers remain optimistic despite challenges.
Frequently Asked Questions about Spain's manufacturing sector faces rough start to 2026, PMI shows
1What are input prices?
Input prices refer to the costs of the raw materials and components used in the production of goods, which can affect overall production costs and pricing.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and affecting economic stability.
3What are new orders in manufacturing?
New orders in manufacturing refer to the requests for new products or services, indicating demand and future production levels for manufacturers.
4What is employment trend?
Employment trends refer to the changes in job availability and hiring practices within a sector, reflecting economic conditions and business performance.
