Technical Analysis

Spain December manufacturing PMI 46.4 vs 46.2 expected


Despite a slight improvement, this marks yet another contraction in Spanish manufacturing activity with a still severe fall in new orders being recorded. The good news is that cost pressures are continuing a bit of a downwards trend but inflation remains a key problem among businesses. S&P Global notes that:

“December rounded off a miserable half-a-year or so for the Spanish manufacturing economy, with the sector probably mired in a technical recession. Hit hard by elevated inflation , economic instability, and general uncertainty, both output and new orders declined sharply.

“And yet there is hope within the latest PMI dataset that the sector has at the very least stabilised, if not even turned a corner and is on a path back towards better health. Order books fell at a slower rate, employment was unchanged following a prolonged downturn and confidence about the future has strengthened noticeably.

“Moreover, there were also signs that the dominant themes of the pandemic, supply constraints and then exceptionally high price pressures, are dissipating. Delivery times were only modestly worse, whilst cost inflation dropped to a two-year low.”

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