2026.07.0107:23:49UTC+00Spain Manufacturing Sector Unexpectedly Contracts

The S&P Spain Manufacturing PMI declined to 49.7 in June 2026 from 51.2 in May, falling short of market expectations of 51 and indicating a mild contraction in the sector. The slowdown was largely driven by a sharp drop in both new orders and export demand, as geopolitical uncertainty linked to the Middle East conflict led many firms to suspend operations and postpone major decisions. As a result, manufacturers reduced output for the first time in three months, although warehouse inventories edged up for the first time in 19 months. Faced with weaker sales, companies slightly trimmed staffing levels and scaled back purchasing. At the same time, the Middle East crisis continued to disrupt supply chains, leading to significant shipping delays and shortages of key components. These bottlenecks pushed up supplier prices for fuel and raw materials, prompting manufacturers to enact their steepest output price increases since October 2022 in an effort to protect profit margins.