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Why Spain’s Manufacturing PMI Has Been Falling Gradually

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Spain manufacturing PMI in April

According to a report by Markit Economics, Spain’s manufacturing PMI has been falling gradually since February. It stood at 54.4 in April compared to 54.8 in March. April’s PMI figure beat the preliminary market estimate of 54.2. April’s figure pointed to the lowest expansion in factory activity since September 2017.

The performance of Spain’s manufacturing PMI in April was mainly due to the following factors:

  • Production volume and output witnessed a slower rise in April compared to March. Similarly, factory activity also showed softer improvement in that month.
  • New business orders and export orders showed a softer rise in April.
  • Employment in the manufacturing sector grew marginally in April.
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Performance of various ETFs in April

The iShares MSCI Spain Capped ETF (EWP), which tracks Spain’s economic performance, rose 2.3% in April. However, the Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (IEV) economic performance, rose 2.1% in April.

It was expected that the major economies of the Eurozone would suffer from the rising tension in US–China trade relations. As major economic indicators of the Eurozone fell in 1Q18, the economic growth of that area also weakened in the quarter compared to 4Q17. Various short-term factors are expected to affect each economy’s demand outlook in that area.

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

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