- Manufacturing PMI 49.7 vs 51.0 expected
- Prior 51.2
That’s a notable miss on estimates as Spanish manufacturing activity slumped to a marginal contraction in June. A steeper drop in new orders and lower output underpins the deterioration of manufacturing sector. Meanwhile, high prices and unwinding of client stockpiling
leads to lower sales.
The Middle East conflict continues to weigh heavily on market demand, leading to an accelerated and
marked drop in new orders. As such, production also fell for the first time in three months.
Besides that, S&P Global highlights the pain points on supply chains and prices too:
“Regarding supplier performance in June, the impact on
supply chains of the Middle East conflict was again keenly
felt. Whilst easing on May’s recent record, vendor delivery
times deteriorated to a historically marked degree. Firms
reported that supply chains remained under noticeable
stress, with shipping delays and stock shortages at vendors
common.
Supplier prices were also reported to be still rising in June
and meant that cost inflation was still elevated, despite
easing quite noticeably on May’s four-year high. The impact
of elevated oil and gas prices due to the conflict in the Middle
East was reported to be pushing up prices for a wide range of
goods from suppliers. Similarly, manufacturers themselves
chose to increase their own charges, with the latest data
showing the steepest rise in output prices since October
2022.”
That’s not a good look if the trend catches on elsewhere in the region, which is likely, and carries over into the summer. Stagflation much?
This article was written by Justin Low at investinglive.com.
