The HCOB Spain Manufacturing PMI climbed to 50.5 in May 2025 from 48.1 in April, beating market forecasts of 48.4. This marked the first expansion in the manufacturing sector after three consecutive months of contraction and the highest reading since January. Some panelists attributed the higher production to a relative improvement in underlying demand and a partial easing of global tariff uncertainty that had significantly dampened market activity in April. Although sales volumes declined, the drop was modest and the smallest in four months. Firms continued to expand their workforce for a third month in a row. Moreover, the soft trend in buying activity contributed to a decline in input costs, which fell for the first time since the start of 2024. Firms also cut output charges at the fastest pace since September last year amid reports of intensive market competition. Lastly, sentiment about output for the next 12 months improved to a three-month high.