Spain Surges Ahead as Europe’s Leading Private Sector in Q3 2025
Spain leads private sector growth in Europe at the start of Q3 2025, with a Composite PMI of 54.7 and strong service sector orders.
Key Points
- • Spain's Composite PMI rose to 54.7 in July, indicating strong growth.
- • The private sector has seen 20 consecutive months of expansion in Spain.
- • The Eurozone's PMI growth was moderate at 50.9, reflecting ongoing challenges.
- • Optimism remains for the Spanish economy despite external trade uncertainties.
At the beginning of the third quarter of 2025, Spain stands out as the leader in private sector growth across Europe, according to new data released by S&P Global and the Hamburg Commercial Bank (HCOB). The Spanish Composite PMI, which reflects both manufacturing and services activity, rose to 54.7 in July, a significant increase from 52.1 in June, marking the 20th consecutive month of expansion for the Spanish private sector.
Jonas Feldhusen, a junior economist at HCOB, noted, "These figures strengthen expectations for continued growth, especially highlighting a surge in activity and new orders within the services sector." In addition, the Spanish economy enjoyed robust GDP growth of 0.7% in the second quarter, further aiding the optimistic outlook for the months ahead.
On the contrary, the Eurozone's overall private sector growth remained more subdued, with a Composite PMI of 50.9, a marginal increase indicating only slight expansion. Challenges continue to plague the Eurozone, including a sustained decrease in international demand persisting for 41 months. Despite limited employment growth in the Eurozone, there was, however, a recorded increase that marked the most significant rise in over a year.
Inflation dynamics indicate a slowing in input cost inflation, while selling prices saw a small increase. The sentiment among Eurozone businesses has declined for the first time in three months, reflecting a cautious outlook affecting both manufacturing and services.
Despite these hurdles, Feldhusen remains positive about Spain’s potential, noting improvements in domestic demand amidst ongoing global trade uncertainties, which could be addressed by recent trade agreements between the U.S. and EU, though potential tariff threats from the U.S. government remain a concern.