December 2025 HCOB Manufacturing PMI for Spain: A Moderating Expansion Amid Mixed Signals
The latest HCOB Manufacturing PMI for Spain, released on December 1, 2025, registers at 51.50, signaling continued expansion but at a slower pace than expected. This reading, sourced from the Sigmanomics database, falls short of the 52.30 consensus estimate and slightly below November’s 52.10. The data reflects a manufacturing sector navigating a complex macroeconomic environment marked by tightening financial conditions, cautious fiscal policy, and external uncertainties. This report offers a data-rich, forward-looking analysis of the PMI’s implications for Spain’s economy, monetary policy, and financial markets.
Table of Contents
The December 2025 HCOB Manufacturing PMI for Spain at 51.50 marks a modest slowdown from November’s 52.10 and remains above the 12-month average of 50.90. The index has oscillated between contraction and expansion over the past year, with lows near 48.10 in May and a peak of 54.30 in September. This volatility reflects ongoing adjustments to global supply chain disruptions, inflationary pressures, and shifting demand patterns.
Drivers this month
- Moderate new order growth slowed from 1.20% MoM to 0.60%.
- Input cost inflation eased slightly but remains elevated at 4.30% YoY.
- Employment growth in manufacturing softened, reflecting cautious hiring.
Policy pulse
The PMI reading sits just above the 50 expansion threshold but below the ECB’s inflation target zone, signaling subdued manufacturing momentum. The European Central Bank’s recent rate hikes and forward guidance suggest a cautious approach to further tightening, balancing inflation control with growth risks.
Market lens
Immediate reaction: EUR/USD dipped 0.15% within the first hour post-release, reflecting disappointment versus expectations. Spanish 2-year yields rose 5 basis points, while the IBEX 35 index declined 0.40%, indicating investor caution.
Core macroeconomic indicators provide essential context for the PMI’s implications. Spain’s industrial production growth slowed to 0.30% MoM in October, consistent with the PMI’s moderation. Inflation remains sticky at 3.80% YoY, driven by energy and raw material costs. Unemployment in manufacturing edged down to 9.70%, but labor market slack persists.
Monetary Policy & Financial Conditions
The European Central Bank’s deposit rate stands at 3.75%, with recent hikes aimed at anchoring inflation expectations. Financial conditions have tightened, with credit spreads widening modestly and lending standards becoming more restrictive. These factors weigh on manufacturing investment and output growth.
Fiscal Policy & Government Budget
Spain’s fiscal stance remains prudent, with a 2025 budget deficit target of 3.10% of GDP. Recent government measures focus on targeted support for green manufacturing and digital transformation, but broad stimulus is limited amid EU fiscal rules. This restrained fiscal backdrop tempers demand-side support for manufacturing.
External Shocks & Geopolitical Risks
Global supply chain disruptions have eased but remain a risk, particularly from Asia-Pacific tensions and energy market volatility. The ongoing uncertainty around EU trade relations with key partners adds to export headwinds for Spanish manufacturers.
This chart reveals a manufacturing sector that is stabilizing after mid-year weakness but facing headwinds from cost pressures and demand uncertainty. The PMI’s trend suggests moderate expansion, with risks tilted toward slower growth if external shocks intensify or financial conditions tighten further.
Market lens
Immediate reaction: The IBEX 35 index fell 0.40% post-release, while Spanish 2-year bond yields rose 5 basis points, reflecting investor caution. EUR/USD declined 0.15%, signaling a mild risk-off response to the softer-than-expected PMI.
Looking ahead, the manufacturing PMI’s trajectory will hinge on several factors. The base case scenario (60% probability) envisions steady expansion near 51-52, supported by gradual easing of supply constraints and stable domestic demand. The bullish scenario (20%) assumes stronger global growth and easing inflation, pushing PMI above 53. The bearish scenario (20%) involves renewed geopolitical tensions or sharper financial tightening, dragging PMI below 50 and into contraction.
Structural & Long-Run Trends
Spain’s manufacturing sector is undergoing structural shifts toward higher value-added industries, green technologies, and digitalization. These trends may dampen short-term output but improve long-term resilience and productivity. Investment in innovation and workforce skills will be critical to sustaining growth amid global competition.
Risks & Opportunities
- Upside: EU recovery funds and green transition investments could boost manufacturing output.
- Downside: Persistent inflation and tighter ECB policy may constrain demand and margins.
- External: Trade disruptions or energy price shocks remain key risks.
The December 2025 HCOB Manufacturing PMI for Spain signals a manufacturing sector in modest expansion but facing headwinds. The data aligns with a cautious macroeconomic outlook shaped by monetary tightening, restrained fiscal policy, and external uncertainties. Market reactions underscore sensitivity to growth signals amid fragile investor sentiment. Structural reforms and targeted investments will be vital to enhance Spain’s manufacturing competitiveness over the medium term.
Key Markets Likely to React to HCOB Manufacturing PMI
The PMI’s release typically influences Spanish equities, the euro currency, and fixed income markets. The following symbols historically track PMI fluctuations:
- TEF – Telefónica, a major Spanish stock sensitive to domestic economic activity.
- IBEX – Spain’s benchmark equity index, reflecting broad market sentiment.
- EURUSD – Euro to US dollar, sensitive to Eurozone growth signals.
- EURGBP – Euro to British pound, reflecting regional economic divergences.
- BTCUSD – Bitcoin, often reacts to risk sentiment shifts linked to macro data.
Insight: PMI vs. IBEX 35 since 2020
Since 2020, the HCOB Manufacturing PMI and IBEX 35 have shown a positive correlation of approximately 0.65. Periods of PMI expansion above 50 generally coincide with upward trends in the IBEX 35, reflecting investor confidence in Spain’s economic growth. Notably, PMI dips below 50 in early 2025 preceded market corrections, underscoring the PMI’s role as a leading indicator for equity performance.
FAQs
- What does the HCOB Manufacturing PMI indicate about Spain’s economy?
- The PMI signals moderate manufacturing expansion, suggesting steady but cautious economic growth in Spain.
- How does the PMI affect monetary policy decisions?
- The PMI informs the ECB about manufacturing sector health, influencing interest rate and inflation control measures.
- Why is the PMI important for investors?
- Investors use the PMI to gauge economic momentum, adjusting portfolios in equities, bonds, and currencies accordingly.
Key takeaway: Spain’s manufacturing sector remains in expansion but faces headwinds from tighter financial conditions and external risks, warranting close monitoring in coming months.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The December PMI of 51.50 compares to November’s 52.10 and the 12-month average of 50.90, indicating a slight deceleration but sustained expansion. The index has shown resilience since the mid-year trough of 48.10 in May, recovering sharply to 54.30 in September before normalizing.
Month-on-month, new orders and output growth slowed, while input price pressures eased marginally. Employment growth in manufacturing remains positive but subdued, reflecting firms’ caution amid uncertain demand and tighter financing.