MADRID (Reuters) - Growth in Spanish manufacturing activity sped up slightly in October, a survey showed on Monday, though companies cut staff at a faster rate, pointing to a weak, jobless recovery in the fourth quarter.
Markit’s Purchasing Managers’ Index (PMI) of manufacturing companies stood at 50.9 in October, just above September’s 50.7 and marking the third straight month above the 50 line separating growth from contraction.
Spain’s economy returned to growth in the July-September period after nine quarters of contraction, driven by a strong export sector. But unemployment came in at 26 percent and is expected to remain high for years.
“The improving picture in the Spanish manufacturing sector continued in October, although there is little sign so far of a widening build-up of momentum,” said Markit economist Andrew Harker.
“The most positive aspect from the latest survey was a quickening of new order growth, but again this seemed to be mainly based on success in export markets rather than a broad-based improvement in client demand.”
While the external sector has helped the economy recover from a two-year recession in the wake of a burst property bubble, the domestic economy that should provide jobs remains deeply depressed.
Markit’s manufacturing employment index fell to 45.2 in October from 47.5 a month earlier, with some of those polled reporting that increasing new orders had not offset layoffs as companies are still restructuring their workforces.
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Reporting by Paul Day; Editing by Hugh Lawson