MADRID (Reuters) -Spain’s manufacturing sector returned to growth in May for the first time since January as a partial lifting of U.S. tariffs fuelled business optimism, a survey showed on Monday.
The HCOB Spain Manufacturing PMI, compiled by S&P Global, rose to 50.5 in May from 48.1 in April, just above the 50.0 mark that separates growth from contraction.
The indicator showed growth for the first time since January when it was 50.9.
The improvement was driven by a modest expansion in output, which was linked to a better trend in sales and a partial easing of global tariff uncertainty compared to April, the survey said.
“While Spain’s direct dependence on the U.S. market is relatively limited compared to countries like Germany or Italy, indirect effects from a generally improved global trade outlook may also be contributing,” said Jonas Feldhusen, Junior Economist at Hamburg Commercial Bank.
Looking ahead, business expectations improved to a three-month high, with firms hopeful for a more stable economic environment over the next 12 months.
However, uncertainty remains due to erratic U.S. trade policy under President Trump which continues to limit global planning reliability.
Spain’s economic growth slowed slightly in the first quarter but the manufacturing sector kept expanding rapidly, the National Statistics Institute said on Tuesday. The government expects the economy to expand 2.6% this year, a much faster rate than in neighbouring countries such as France, Germany or Italy.
(Reporting by Inti Landauro; Editing by Toby Chopra)
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