Spain's factory activity picks up after August slump

Spanish factory activity expanded slightly in September, after having shrunk the month prior owing to a resurgence of coronavirus cases, a report has shown.

IHS Markit's Purchasing Manager's Index (PMI) rose to 50.8 in September from 49.9 in August. Any reading above 50 means there was sector growth for that period.

Paul Smith, Economist at IHS Markit told Reuters: “Whilst there was a return to growth in September, the latest data suggests the manufacturing sector continues to struggle to regain meaningful traction."

Smith said that despite the industry struggling to stay afloat, certain markets, such as an increase in export sales and growth for capital goods markets performed better than expected in September, but firms remain cautious about future slumps.

Following the coronavirus outbreak, the Spanish economy contracted a record 17.8% in the second quarter from the previous quarter and 21.5% compared with the same quarter a year earlier.

The IMF said it expects Spanish GDP to decrease by 12.8% this year and rebound by 7.2% next year.

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