Spain's factory activity picks up in September after August dip - PMI

MADRID (Reuters) - Spanish factory activity expanded slightly in September, a survey showed on Thursday, having shrunk the previous month amid a resurgence of coronavirus infections.

IHS Markit's Purchasing Managers' Index (PMI) of manufacturing companies rose to 50.8 in September from 49.9 in August. A reading above 50 denotes growth.

The index had dived to 30.8 in April, when all non-essential economic activity was halted by a lockdown to curb the virus.

"Whilst there was a return to growth in September, the latest data suggests the manufacturing sector continues to struggle to regain meaningful traction," said Paul Smith, Economist at IHS Markit.

There were some bright spots, according to Smith, such as an export sales increase and growth for capital goods makers, but firms remain cautious.

Following the coronavirus lockdown, the Spanish economy contracted a record 17.8% in the second quarter from the previous quarter and 21.5% compared with the same quarter a year earlier.

The IMF said on Wednesday it expects Spanish GDP to slump by 12.8% this year and rebound by 7.2% next year.

(Reporting by Inti Landauro; Editing by Hugh Lawson)