MADRID, Feb 1 (Reuters) – Industrial activity in Spain continued to contract in January, even as inflationary pressures eased and business confidence strengthened, a survey showed on Wednesday.
The S&P Global Purchasing Managers’ Index (PMI) for manufacturing rose to 48.4 in January from 46.4 in December, but remained below the 50.0 mark that separates growth from contraction.
The monthly drop, the seventh in a row, was the smallest since September, according to the survey.
“The Spanish manufacturing sector started 2023 slightly better off compared to the second half of 2022,” said S&P Global economist Laura Denman, adding that the sector appeared to be over the worst of the current recession.
He added that inflationary pressures are likely to continue easing as a result of rising interest rates and slowing consumer demand.
Manufacturers’ optimism for the coming year reached its highest level since last June “amid hopes for successful product launches, business expansion plans and new projects,” S&P Global said.
Even so, Spanish economic growth is expected to slow down this year. The government has forecast growth of 2.1% in 2023, down from 5.5% in 2022, while many analysts expect growth to be even slower.
(Reporting by Inti Landauro; Editing by Hugh Lawson)
