The HCOB Spain Composite PMI fell to 51.4 in May 2025 from 52.5 in April, marking the weakest expansion since the current growth sequence began in December 2023. Service sector activity slowed sharply (51.3 vs 53.4), hitting its lowest level since November 2023, as heightened uncertainty—particularly among international clients—weighed on demand. Manufacturing, however, posted modest output gains (50.5 vs 48.1), recovering slightly from April’s contraction. Tariff-related uncertainty continued to hinder business decisions and market activity, leading to only marginal growth in new work—the weakest since December 2023. Nonetheless, firms continued hiring and were able to slightly reduce backlogs. In terms of prices, input costs and output charges both rose at a slower pace in May, though inflation rates remained above their historical averages.