Spanish manufacturing edges higher in June; new orders decline

Spain’s manufacturing activity edged slightly higher in June, but new orders declined at their slowest pace in more than two-and-a-half years as domestic demand faltered. Spain has been embroiled in a political turmoil over the past six months.

Markit's Purchasing Managers' Index (PMI) of manufacturing companies' activity rose to 52.2 in June from 51.8 in May, the 31st straight month that the index held above the 50 line separating growth from contraction. But new orders weakened to 50.6 from 50.8 a month earlier, their slowest rate of expansion since November 2013 and largely fed by improving exports as demand stagnated at home, data released by Markit showed.

"It seems unlikely that production could continue to rise at the current pace should weakness in new business continue, and so firms will be anxious to see client demand pick up in coming months, particularly from domestic sources," said Andrew Hawker, Senior Economist, Markit.

Meanwhile, weakness in new business is expected to hamper manufacturing growth in the coming months. Therefore, firms shall remain anxious to witness client demand, particularly from domestic sources.