MADRID (Reuters) – Spanish factory activity recorded its strongest monthly growth in two decades in June, a survey showed on Thursday, beating May’s record as looser COVID-19 restrictions led to a surge in demand from service businesses like hotels and restaurants.
IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing rose to 60.4 last month from 59.4 in May, which was already the highest level since April 1998. Figures above the 50.0 mark indicate expansions in activity.
“Order books were swelled by improved demand from across a spectrum of sources, with hospitality reportedly a key driver of growth as the economy reopens further in line with easing COVID restrictions,” said Paul Smith, an economist at IHS Markit.
The strong growth is coming alongside challenges with supply chains, creating pressure on wholesale prices.
While Spain’s economy shrank 0.5% in the first quarter as COVID-19 restrictions hurt businesses, Prime Minister Pedro Sanchez said earlier this week that the country’s output expanded a record 18% in the second quarter from a year ago.
The government expects the economy to grow 6.5% this year after 2020’s record 10.8% contraction.
(Reporting by Inti Landauro; Editing by Catherine Evans)
