- Andrew Harker, an economist at Markit
Activity in the Spanish manufacturing sector rose at a slower pace in July, even despite the fact that companies continued to take on new employees in a sign that the economic recovery is set to gain steam. In its report, Markit said that Manufacturing PMI declined to 53.9 compared with 54.6 in the previous month, still signalling an eighth consecutive month of expansion. The survey shows that growth is likely to continue, with new orders rising although at a slower pace than in June. However, the pace of new hiring was moderate, and it will likely take years to bring the jobless rate down from the record high levels it reached in the wake of a boom and collapse in Spain's construction sector. Spain's economy grew at its fastest quarterly pace in six years during the second quarter, with gross domestic product increasing by 0.6% from the three months to March. The recovery of the Spanish economy, the Euro zone's fourth largest, has been one of the most positive developments for the currency area over the past nine months.
In the meantime, Italy's manufacturing PMI fell to 51.9, the lowest level since November, down from 52.6 in the previous month. While the figures signalled a 13th month of expansion, it was below the median forecast of 52.5. For the Euro region as a whole, the Markit Economics gauge was at 51.8, compared with a prior estimate of 51.9.
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