- Prior 56.2
There's some good and bad in the report as Spanish factory output rises at its strongest pace in five months. Employment gains were also solid - highest in six months - with higher new orders observed. However, supply shortages once again continue to underpin input costs with output charges also increasing at a record pace. Markit notes that:
“The Spanish manufacturing sector expanded at a firmer rate in February as market demand continued to improve and manufacturers expanded capacity to raise production capabilities.
“However, shortages in supply, both in staffing and material inputs, were again reported, and these continued to underpin sharply rising input costs. Perhaps more concerning was that these higher prices were again passed through the supply chain at a frighteningly elevated pace: charges rose to an unprecedented degree in February.
“Moreover, evidence of a bullwhip impact in purchasing persisted with firms raising their input buying and engaging in input inventory building to the greatest degree in 24 years. Although firms are rationally trying to get ahead of product shortages and expected price rises, such behaviour, from a macro perspective, is adding further fuel to already elevated inflation pressures.”