Manufacturing activity in Spain rebounded in October, registering its strongest growth in over two years, with increases in output, new orders, and hiring, according to a survey released on Monday.

The HCOB Purchasing Managers' Index (PMI) for Spain's manufacturing sector, compiled by S&P Global, climbed to 54.5 in October, up from 53.0 in September.

This marks the ninth consecutive month with a reading above the 50 threshold that distinguishes growth from contraction, and it is the highest level since February 2022, Reuters news agency reports.

“Manufacturing companies are looking to grow their workforce, and there is optimism for a stable economic environment, supported by the ECB's (European Central Bank) easing measures,” stated Jonas Feldhusen, junior economist at Hamburg Commercial Bank, in the S&P Global report.

The growth was widespread, with new export business increasing at its fastest pace in nearly three years, according to the monthly report. 

As production and hiring surged, business confidence climbed to a five-month high.

The October PMI data suggests that the robust economic growth observed in the third quarter has continued into the following quarter.

“It was a strong start to the final quarter for Spain's manufacturing sector. After a notable slowdown in growth throughout the summer, as indicated by our PMI data, Spain's manufacturing sector saw a marked resurgence in both September and October. The index has shown further improvement, with an impressive rise to 54.5 points, indicating accelerated monthly growth. Survey respondents reported increased demand, which is reflected in stronger order books, driving companies to ramp up production,” the report added.

In addition, last Wednesday the country’s statistics department said the economy expanded at a faster than expected 0.8% pace in the third quarter, compared with 0.4% for the eurozone as a whole, with annual growth reaching 3.4%.

The government recently upgraded its growth forecast for 2024 to 2.7%.