Spanish manufacturing returns to growth in September, PMI shows

Oct 1 (Reuters) - Spain's manufacturing sector resumed growth in September as output rose for the first time in four months despite sluggish demand and higher prices, while business confidence improved on expectations of stronger demand, a business survey showed on Thursday.

The S&P Spain Manufacturing Purchasing Managers' Index (PMI) rose to 51.0 last month from 49.5 in August, according to the survey by S&P Global. The 50-mark separates growth from contraction.

"The performance of Spain's manufacturing sector improved in September, with the sector displaying resilience in the face of intensifying price pressures," said Paul Smith, Economics Director at S&P Global Market Intelligence, pointing also to stronger confidence in the outlook.

Business confidence rose to its highest since February as companies expected demand to strengthen over the coming year.

Production increased after three straight monthly declines, with new export orders rising for the first time since August 2025, S&P Global said.

Still, overall new orders fell for a fifth successive month. Firms linked the marginal decline to uncertainty and the impact of rising prices, mainly for energy amid the U.S.-Iran war, on demand.

Input cost inflation accelerated to its strongest in four months, while output price inflation picked up to a three-month high as manufacturers passed on part of those higher costs. 

Employment was unchanged, ending a 12-month run of net job losses as some firms recruited in response to firmer workloads.

(Reporting by Andrei Khalip; Editing by Toby Chopra)