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MADRID, June 1 (Reuters) – Spain’s manufacturing sector expanded modestly in May, at a slightly slower pace than in April, as disruptions linked \u200cto the Middle East conflict worsened supply delays, raised costs \u200cand weighed on demand, a business survey showed on Monday.<\/p>\n
In the survey by S&P Global, the \u200bcountry’s Manufacturing Purchasing Managers’ Index (PMI) fell to 51.2 in May from 51.7 in April. The 50-mark separates growth from contraction.<\/p>\n
“May indicated a partial reversal of last month’s safety stock-driven manufacturing sector growth,” said Paul Smith, Economics Director at S&P \u200cGlobal Market Intelligence.<\/p>\n
“This was \u2060linked to the dual forces of elevated prices and ongoing uncertainty, which were seen by manufacturers as negatively impacting client \u2060budgets and resulting in a drop in their sales over the month,” Smith added.<\/p>\n
Output rose for a second month, but only marginally and at a weaker \u200bpace than \u200bin April. Respondents linked the slowdown \u200bto weaker incoming demand after \u200cnew orders fell for the fifth time in six months.<\/p>\n
Export demand also remained under pressure. New export orders declined for a ninth straight month, although the rate of contraction was the weakest since February.<\/p>\n
The pace of job cuts was marginal and the weakest since February.<\/p>\n
Supply strains intensified sharply. Vendor performance deteriorated \u200cto the greatest extent in four years, \u200bwhile input price inflation hit a four-year \u200bhigh.<\/p>\n
Confidence improved to a three-month \u200bhigh from March’s near two-and-a-half-year low, but remained below its \u200chistorical average as firms cited geopolitical \u200buncertainty, weak demand \u200band the risk of further price rises.<\/p>\n
The government expects the Spanish economy, which is among the top performers in Europe, to expand 2.2% \u200bthis year after 2.8% \u200cin 2025, although it has acknowledged that the war in the \u200bMiddle East could weigh on the forecast.<\/p>\n
(Reporting by David Latona; Editing \u200bby Andrei Khalip and Toby Chopra)<\/p>\n<\/p><\/div>\n