- Prior 48.0
Softness in demand conditions continues to weigh as the Spanish manufacturing downturn deepens in July. There was a sharp reduction in both output and new orders but at least there is further downward pressure on prices as well on the month. HCOB notes that:
"The deterioration of Spain’s manufacturing sector is moving on at a steady pace, without panic. Still, it’s a downturn, as output is dropping and fewer new orders are coming in. We see an increased probability that the sector will experience a mild recession in the second half of the year. It might be bit of consolation that the drop in activity is much more pronounced in other parts of the eurozone, as evidenced by the latest flash releases.
“The Spanish export sector faces an unsettling phase as new export orders lost further footing, falling at their fastest pace since December of last year.
“The investment goods sector, which has been the backbone for the industry in the first half of the year, now seems to have lost its resilience. The corresponding PMI index slipped into contractionary territory. Possibly some companies have held back on their plans amid the uncertainty in the context of the general elections carried out at the end of July.
“Following the severe disruptions to supply chains during the pandemic, delivery times are now back to normal. Latest survey data indicated that delivery times are no longer shortening, as had been the case in each of the past few months.”