Spanish manufacturing sector growth accelerates in July, PMI shows

MADRID (Reuters) -Spain's manufacturing sector expanded at its fastest pace this year in July, as production and new orders rose to their highest levels of the year, a survey showed on Friday.

The HCOB Spain Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 51.9 in July from 51.4 in June, marking the third consecutive month of growth. PMI readings above 50 indicate expansion in activity, while those below suggest contraction.

The growth was the fastest since December 2024, when the indicator was 53.3.

The increase in production was attributed to new projects and rising demand, mainly domestic.

"Industrial production has now been expanding for three consecutive months and is likely to receive further support in the coming months from this improved demand environment," said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank, according to the S&P report.

Export sales showed marginal growth, snapping a five-month contraction streak, despite ongoing global economic uncertainties.

Employment in the sector increased for the fifth consecutive month, with the rate of job creation reaching its highest since December 2024.

However, manufacturers' confidence fell to a three-month low due to geopolitical and macroeconomic uncertainties.

The Spanish economy has outpaced other large economies in the euro zone, with a 0.7% growth in the second quarter, statistics department INE said on Tuesday.

The Spanish government expects 2.6% growth this year.

(Reporting by Inti Landauro; Editing by Toby Chopra)

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