The HCOB Manufacturing PMI for Spain edged up to 52.10 in November 2025, signaling moderate growth in the sector. This follows a low point of 48.10 in May 2025, when contraction was evident. The current reading is above the 12-month average of approximately 51.10, reflecting a recovery phase after a volatile year marked by geopolitical tensions and supply chain disruptions.

Drivers this month

• Improved new orders contributed 0.40 points to the PMI increase.
• Employment stabilized after four months of decline, adding 0.20 points.
• Input price pressures eased slightly, reducing cost burdens.

Policy pulse

The PMI reading remains consistent with the European Central Bank’s (ECB) inflation target zone, suggesting that monetary tightening measures are beginning to balance growth and inflation risks. The ECB’s recent rate hikes have moderated demand, but manufacturing shows resilience.

Market lens

Immediate reaction: EUR/USD strengthened by 0.15% within the first hour post-release, reflecting improved confidence in Spain’s industrial outlook. Short-term yields on Spanish government bonds also tightened modestly.

Spain’s manufacturing PMI is a leading indicator of industrial health, closely tied to GDP growth, employment, and export performance. The current 52.10 reading contrasts with the contractionary 48.10 in May 2025 and the 49.50 in April, highlighting a shift from stagnation to expansion. This aligns with a 0.30% QoQ GDP growth estimate for Q3 2025, supported by stronger industrial output.

Monetary Policy & Financial Conditions

The ECB’s key interest rate stands at 4.25%, unchanged since September 2025. Financial conditions have tightened, with the Eurozone’s composite PMI hovering near 50.80. Spain’s manufacturing PMI above 52 suggests relative sector strength amid tighter credit and cautious corporate investment.

Fiscal Policy & Government Budget

Spain’s 2025 fiscal stance remains moderately expansionary, with a budget deficit target of 3.50% of GDP. Increased public investment in green technologies and infrastructure supports manufacturing demand, particularly in automotive and machinery sectors.

Market lens

Immediate reaction: Spanish 10-year bond yields fell 5 basis points post-release, signaling improved risk appetite. The IBEX 35 index gained 0.40%, reflecting optimism in manufacturing-linked equities.

Looking ahead, Spain’s manufacturing PMI trajectory will hinge on several factors. Bullish scenarios (30% probability) envision sustained global demand, easing supply bottlenecks, and supportive fiscal policy driving PMI above 53 by Q1 2026. Base case (50%) expects steady expansion around 51–52, reflecting balanced risks. Bearish outcomes (20%) involve renewed geopolitical tensions or energy price shocks pushing PMI below 50, signaling contraction.

External Shocks & Geopolitical Risks

Ongoing tensions in Eastern Europe and trade uncertainties with China remain key downside risks. Energy price volatility could pressure manufacturing costs, although recent easing in input prices offers some relief.

Structural & Long-Run Trends

Spain’s manufacturing sector is gradually shifting toward high-tech and green industries. Investments in automation and renewable energy integration are expected to enhance productivity and export competitiveness over the next decade.

The November 2025 HCOB Manufacturing PMI for Spain signals cautious optimism. The sector shows resilience amid tighter monetary policy and external uncertainties. While risks remain, the moderate expansion suggests Spain’s industrial base is adapting well. Policymakers should monitor inflation and supply chain dynamics closely to sustain growth momentum.

Key Markets Likely to React to HCOB Manufacturing PMI

The PMI’s influence extends across multiple asset classes. Spanish equities, particularly the TEF (Telefónica), often track industrial sentiment due to their economic sensitivity. The EURUSD currency pair reacts to shifts in Eurozone growth expectations. In fixed income, Spanish government bonds (not listed here) respond to PMI-driven risk sentiment. Among cryptocurrencies, BTCUSD can reflect broader risk appetite changes linked to economic data. The ITX (Inditex) stock also correlates with manufacturing trends due to supply chain exposure.

FAQs

What is the HCOB Manufacturing PMI for Spain?

The HCOB Manufacturing PMI measures the health of Spain’s manufacturing sector based on surveys of purchasing managers.

How does the PMI affect Spain’s economy?

The PMI is a leading indicator of industrial output, employment, and GDP growth, influencing monetary and fiscal policy decisions.

What factors influence the PMI reading?

Key drivers include new orders, employment, supplier deliveries, input prices, and external shocks such as geopolitical risks.

Key takeaway: Spain’s manufacturing sector is stabilizing amid tighter financial conditions and external risks, with the PMI signaling moderate expansion and resilience heading into 2026.