- Prior 47.7
A steep plunge in production, new orders, and employment makes for a really poor report for Spain's industry to start Q3. HCOB notes that:
“These PMI manufacturing figures are downright nasty. Output is hitting the brakes hard, and new orders have taken a steep slide from the previous month. Part of it was due to weak external demand. But it looks as if domestical clients are also stepping back from buying manufactured goods. In addition, purchases took a hard hit, underscoring the fragile situation of the sector.
“Spain’s manufacturing sector is stuck in a recession pit and digging deeper. With the updated PMI numbers considered in our GDP nowcast, manufacturing could plummet by 2% in the fourth quarter. And after the drops in the two quarters before we could end up in the red for nine months straight since April by the end of the year.
“The destocking cycle does not seem to be over in Spain. Companies are clearing out their inventories of purchased goods fast, hitting a ten-year record – just like during the 2011 to 2013 downturn. Thus, companies may wait a while until they restart to build up inventories again.
“While output prices fell at a much faster rate in October, input prices decreased at a somewhat lower pace in comparison to the month before. Manufacturers were slashing their selling prices, but the bills they are paying did not see as big of a dip from the month before. This fits into the perception that companies are losing their ability to set prices.”
