2023-08-01 09:58:19
Updated Tuesday, August 1, 2023 – 09:58
External demand plunges and exporting companies face a “worrying” phase
Factory in Alcal de HenaresJavi MartínezIn the EU First alert of “intense slowdown”: the industry suffers the biggest drop in three years
The Spanish industry has suffered in the month of July the largest drop in orders so far this year, mainly due to the collapse of foreign demand due to the stagnant situation in Europe, which has led our factories to lay off staff and cut back on production.
according to PMI manufacturing sector index published this Tuesday, the Spanish industry “continues to be anchored in a deceleration“, due to the “continuous weakness of demand”, which has caused the most pronounced fall in the price of raw materials used in industrial processes (inputs) since June 2009.
Specifically, this index stood at 47.8 pointscompared to 48 points in June, which represents the sharpest drop so far this year and implies that the indicator remains below the 50-point barrier that delimits the expansion zones (above that level) and contraction (below).
Given the fall in orders, the Spanish manufacturers carried out the production reduction stronger since January. In addition, cut templatesomething that could be confirmed in the registration data for the month of July that will be published this Wednesday and that has also already been observed in the Active Population Survey for the second quarter, in which industry is the only sector that destroyed jobs in the year. period: about 65,000.
prices drop
The industrial slowdown could contribute to the inflation reliefsince the fall in input prices in turn caused a drop in final prices for the fourth consecutive month, in addition to the fact that due to the lack of orders, manufacturers lowered prices to try to be more competitive and gain market share.
“The deterioration of the Spanish manufacturing sector advances at a steady pace, although without panic. Still, this is a slowdown, as production is falling and fewer new orders are coming in. There is a greater possibility that the sector will experience a slight recession in the second half of the year“, point out the experts from the Hamburg Commercial Bank, who also point out that “possibly some companies have stopped their plans in the midst of the uncertainty in the context of elections generals carried out at the end of July”.
Since it is external demand that is falling, they warned that “The Spanish export sector is facing a disturbing phase as new export orders lose more ground, falling at their fastest pace since December last year.
Precisely the external demand has been the one that has stopped the economic growth of Spain between April and June, while the internal consumption and the investment have continued growing and have allowed that the Gross Domestic Product (GDP) will advance by 0.4% quarterly
According to the criteria of The Trust Project
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