- Prior 52.6
Spanish manufacturing falls into contraction territory - first time in over a year-and-a-half - as new orders slumped in the past month, highlighting deterioration in demand conditions amid high inflation pressures and economic uncertainty. As much as the euro area economy was resilient in Q2, things look to have worsened significantly at the start of Q3. S&P Global notes that:
“High inflation , alongside the considerable near-term economic uncertainty that currently resides in Spain and around the world, weighed heavily on the manufacturing economy during July. Demand experienced a noticeable retrenchment – both across domestic and international markets – which led to a drop in output for the first time in a year-and-a-half. With backlogs dropping noticeably and inventory destocking now under way, the near-term outlook for production is clearly to the downside.
“This is also reflected in firms’ expectations, which slumped noticeably to a level broadly on par with that seen in March, following the escalation of conflict in Ukraine. Firms are getting increasingly concerned of a continuation of the economic downturn in the coming months, and as such are taking increasingly defensive positions as highlighted by cuts in employment, inventories and purchasing.”
