Red alert in manufacturing activity in Spain after deteriorating in June for the third consecutive month. Activity in the sector has fallen to its lowest level so far this year, according to the PMI index, which has fallen to 48 points from 48ca.4 the previous month.
“In Spain, there are signs of a slight recession in the manufacturing sector, or perhaps just stagnation,” summed up Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, for whom the weakness in the manufacturing sector may continue for some months more, given the drop in new orders, according to Europa Press.
Reduction of personnel in the template
However, the expert stressed that the slowdown in manufacturing activity in Spain is unlikely to be particularly deep, as surveyed companies are only now starting to cut staff and backlogs provide some stability.
In this sense, the June survey indicates that, despite being slight, the Spanish factories undertook the first downsizing since November of last year. Also, despite the decline in manufacturing employment, the latest survey data continues to show an element of overcapacity within the Spanish manufacturing sector, as backlogs fell for the 13th consecutive month and declined at the strongest pace in the past. what’s up this year
Eurozone activity worsens at 37-month lows
The deterioration of manufacturing activity in the euro zone accelerated in June, according to the PMI index, which fell to 43.4 points from 44.8 the previous month, which implies the worst reading of the data in 37 months, according to data from S&P Global and Hamburg Commercial Bank.
“There is increasing evidence that the investment-intensive industrial sector is reacting negatively to the ECB’s interest rate hikes,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. The June survey reveals that the slowdown in the eurozone manufacturing sector is visible in all geographic contours, as the bloc’s four largest countries remained in contraction in June.
In this sense, the demand for products from the euro zone fell considerably at the end of the second quarter, and the weakness of sales was particularly evident in Austria, Germany and Italy. Likewise, manufacturing employment arrived for the first time in June since January 2021 and business confidence fell to its seven-month low.
On the other hand, the drop in the demand for inputs and the better supply conditions contributed to a sharp decrease in the precious means paid, while the prices charged fell again and did so at the fastest rate in three years.
