- Spain September manufacturing PMI 51.0 vs 50.1 expected
- Prior 49.5
Spain’s manufacturing economy returned to growth territory in September, although the sector’s underlying performance
remained subdued.
The details show that production increased but overall new work continued to decline amid
ongoing uncertainty and rising prices, especially for energy. Of note, new order inflows fell for a fifth successive month, although the pace of contraction was only marginal. Firms cited ongoing uncertainty and the negative impact on demand
of rising prices, which were reported by manufacturers to
be again increasing steeply.
Meanwhile, both input and output prices increased at accelerated and
above trend rates in September. So, that just adds to concerns on inflation and price pressures to the ECB debate.
Input cost inflation was the strongest in four months, and companies saw little choice but to raise their own charges in response. That in turn saw output price inflation also picking up to a three-month high
albeit restricted in part by competitive pressures.
Besides that, supply-side challenges remained apparent in September
and was another source of inflationary pressures to the economy. Average
lead times for the delivery of inputs continued to lengthen
at a historically steep pace, linked by firms to delays on
key maritime shipping routes and a general lack of stock
at vendors.
On its own, the data here represents only one part of the euro area economy. So, the implications toward the ECB outlook are rather limited in isolation. The bigger question is whether the major country and Eurozone PMIs tell the same story about whether the economy is improving and more importantly, whether price pressures starting to become more uncomfortable again.
This article was written by Justin Low at investinglive.com.