S&P Global Spain Manufacturing Purchasing Managers Index (PMI)

Spain's Markit Manufacturing Purchasing Managers Index (PMI) is a macroeconomic report, which demonstrates the economic activity in the Spanish manufacturing sector based on information received from a monthly survey of purchasing managers from the largest companies. The index is prepared by Markit Economics. The index calculation implies the evaluation of corresponding characteristics: respondents determine whether the situation has improved, deteriorated or has not changed. The responses are evaluated taking into account the significance of surveyed companies.

Unlike government indices, the Manufacturing PMI is published at the beginning of the month and demonstrates the national economy state and developments similarly to Tankan in Japan or ISM in the USA.

The Spanish PMI is calculated by Markit Economics in partnership with the Spanish association of purchasing, contracting and procurement professionals (Asociación Española de Profesionales de Compras, Contratación y Aprovisionamientos (AERCE)).

The questionnaire covers a number of parameters, including new orders, performance, prices, inventory and employment. The most important of them are new orders received and intensity of production, while their combined share is more than 50%.

• New orders received from clients
• Intensity of production (speed and level)
• Supplier deliveries (fast or slow)
• Company inventories
• Company employment rate
• Client inventories (approximate evaluation of inventories by the company's clients)
• Prices the company pays for products and services
• Order backlogs (increase or decrease)
• New export orders (the number of orders to be exported)
• Import (amount of imported materials).

The index is seasonally adjusted. Readings above 50 indicate manufacturing sector growth and can have a positive effect on euro quotes. Lower values may indicate possible decrease in economic activity. Readings below 42 can be an indication of possible recession.

The Manufacturing Purchasing Managers Index is one of the main indicators of economic development and a leading indicator of possible recession or economic growth. Purchasing managers are among the first to know when the market conditions change, since they work in the short term and can monitor trends towards changing economic conditions. The Manufacturing PMI growth can demonstrate favorable conditions in the current market and can therefore be seen as positive for the euro.