Business conditions in the Spanish manufacturing sector improved at a moderated pace in July as growth continued to lose momentum from earlier in 2018. Although output increased at a slightly faster pace than in June, rates of expansion in new orders, employment and purchasing activity all slowed. Meanwhile, the rate of input cost inflation accelerated again, with higher aluminium prices widely mentioned. This fed through to a further solid increase in output prices.

The headline IHS Markit Spain Manufacturing PMI dropped to 52.9 in July from 53.4 in June. Although continuing to signal a solid strengthening of the health of the sector at the start of the third quarter of the year, the PMI pointed to the weakest improvement since August last year