Why Spain’s Manufacturing Recorded a Strong Rise in September

Spain’s manufacturing PMI in September

According to a report by Markit Economics, Spain’s manufacturing PMI rose to 54.3 in September 2017, compared to 52.4 in August. The PMI figure beat the preliminary market estimate of 53. This month’s level was the highest since July 2017.

Why Spain’s Manufacturing Recorded a Strong Rise in September

The stronger performance in Spain’s manufacturing PMI was mainly due to the following factors.

  • Production volume and output showed strong improvement in September 2017 and client demand also picked up that month.
  • New business orders also improved at a faster rate in September 2017.
  • Job creation also rose at a faster pace.

Performance of various ETFs in September

The iShares MSCI Spain Capped ETF (EWP), which tracks Spain’s performance, rose marginally in September 2017. The Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (HEDJ)(EZU)(IEV) economic performance, rose 3.2% in September 2017.

The stronger improvement in client demand and domestic demand mainly pushed up manufacturing activity. However, shortages of raw materials push up input cost inflation. The country’s overall business sentiment remained positive in September 2017. The major economies of the Eurozone are showing some improvements in economic activity, which signals that the economy is gradually reaching a healthier place.

In the next part of this series, we’ll analyze the final manufacturing PMI for the Eurozone in September 2017.