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Spain Factory Sector Stagnates In February

Spain's manufacturing sector almost stagnated in February amid a fall in new orders and a lack of new jobs, survey data from IHS Markit showed on Friday.

The IHS Markit Spain Manufacturing Purchasing Managers' Index fell to 49.9 from 52.4 in January. Economists had forecast a score of 51.7.

The PMI fell below the 50.0 no-change mark for the first time since November 2013, thus ending the more than five years of continuous sector growth.

New orders declined for the first time since July 2016, hurt by the weaker foreign demand that fell for the first time in nearly six years mirroring the sluggish demand in neighboring European countries as well as falling sales to China.

Among the three broad manufacturing categories, investment goods logged the sharpest decline in output, new orders and exports.

Manufacturers' confidence fell to a three-month low in February.

"The slowdown in the sector is closely aligned with an increasingly challenging global manufacturing climate, especially in fellow European countries," IHS Markit Economics Director Paul Smith said.

"Worries over Brexit and ongoing challenges in the automotive industry are weighing on demand, especially for capital goods producers who suffered particularly noticeable drops in output and new work during the month."

As these challenges are unlikely to be resolved in the near-term, Smith expects growth to be inevitably restricted over the coming months.

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