Spain manufacturing sector grows at strongest rate for 19 years

Spain’s car making industry has been one of the nation’s recent success stories.

Job creation in Spain’s manufacturing sector has been the strongest this year since 1998, with economist data showing that the country’s Purchasing Managers’ Index (PMI) rose faster than expected, reaching 55.4 in May…

The PMI is a rating mechanism to measure the general health of the manufacturing sector, ranking new orders placed, production output, delivery times and employment figures.

Any ranking over 50 indicates growth over the past month, and analysts reckon that May’s performance was the strongest this century and a clear sign that Spain’s economy is poised to improve its GDP upon last year.

Although unemployment in Spain remains among the highest in the Eurozone at 17.8%, its improvement over the past 12 months is the best among all Eurozone countries.

“May was an excellent month for workers in the Spanish manufacturing sector as firms took on staff at the strongest pace for 19 years,” said IHS Markit senior economist Andrew Harker. “Moreover, with new work rising healthily again and further signs of capacity coming under pressure, the likelihood is that jobs will continue to be created at a decent clip over the near-term at least.”

The strongest sectors in Spain’s economy have traditionally been tourism, agriculture and real estate, but since the double-dip recession the nation’s more liberalised employment laws have delivered a boost to its manufacturing sector, with more companies willing to invest in the Spanish workforce.

The slight downside to this has been an erosion of job security and suppressed wages – something that Prime Minister Mariano Rajoy has promised to address over the coming months.