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HomeLatest NewsIndustry activity expands in February for the first time since June

Industry activity expands in February for the first time since June

Date: March 21, 2023 Time: 16:11:44

Activity in the industry breaks with seven months of falls to expand in February for the first time since June of last year, despite the rise in interest rates that has taken place in that period of time (the price of money is currently at 3% in the Eurozone) and that has made financing costs more expensive, and despite inflation, which remains at 6.1% and continues to put pressure on companies in terms of costs. This is reflected in the Purchasing Managers’ Index (PMI), which rose last month to 50.7 points from 48.4 in January, according to S&P Global Market Intelligence.

The Spanish and Italian factories are the only ones among the largest economies in the euro that stand out from the media in the euro zone and point to an improvement in their activity. In the region as a whole, the PMI stood at 48.5 points on average (from 48.8 in January), although in Germany (46.3), France (47.4) and the Netherlands (48.7) it is even lower. Any reference that falls below 50 in this indicator reflects a contraction in activity.

In the Spanish case, Laura Denman, an economist at S&P Global Market Intelligence, points out that the driving force behind this renewing growth in the sector was the solid rebound in manufacturing production linked to the relative improvement in sales volumes. Indeed, with new orders falling at the slowest rate since June last year, the latest survey data showed some tentative evidence of improving demand, while other positives for February came from employment, which increase for the first time in eight months.

Increase business confidence

Spanish producers registered, however, a new contraction in order book volumes for the ninth consecutive month in February. However, some companies mentioned some tentative signs of recovery in demand. The results with respect to exports revealed a similar picture. February marked exactly one year of falling international demand, but also indicated a slight decline, which was the slowest since May of last year.

“As surveyed companies are hopeful of a recovery in demand and better market conditions in general, firms were optimistic about future production and registered the highest degree of confidence since April last year,” adds the expert. However, on a more negative note, they request that the inflation rates for the costs of inputs and prices charged accelerated compared to the previous month and rose as a result of the attempt to recover demand.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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