Spain's manufacturing growth slows sharply in January, PMI shows

MADRID (Reuters) - Spain's manufacturing sector lost momentum at the start of 2025, as both output and new orders rose at a much slower pace than in December, a survey showed on Monday.

S&P Global's HCOB Spain Manufacturing Purchasing Managers' Index fell to 50.9 in January from 53.3 in December, indicating the slowest growth rate since August. A reading above 50.0 signals expansion, while below indicates contraction.

Export growth was marginal as sales to key European and Latin American markets weakened.

"Momentum in Spain's manufacturing sector has significantly slowed," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank. "Foreign orders broadly stagnated in January, partly due to weakness in major eurozone countries like Germany and France."

Employment growth was minimal, as firms faced cost pressures and restructuring efforts. Input inflation accelerated to its highest level since last July, driven by rising steel prices and transport costs. This led firms to increase output charges for the first time in four months.

Despite these challenges, business confidence remained stable, with firms expecting production to rise, helped by new commercial activities.

Spain's economy grew 3.2% in 2024, outperforming its euro zone peers, after stronger than expected expansion of 0.8% in the fourth quarter.

(Reporting by Inti Landauro; Editing by Christina Fincher)