At 55.4 in March, the seasonally adjusted Spanish Manufacturing Purchasing Managers’ Index, released April 2, continued to signal healthy operating conditions in the Spanish manufacturing sector. Despite easing since the previous month, the PMI was broadly in line with the average for the past year. The headline index has now pointed to growth in each month since July 2005.
“The PMI pointed to the continued robust performance of the Spanish manufacturing economy in March, signaling year-on-year production growth of around 4 to 4.5 percent,” said Juan Carlos Garcia-Centeno, Royal Bank of
Spanish manufacturers’ new order levels increased for the 21st month in a row in March. The rate of new work growth was robust, despite easing to a seven-month low. Reports from firms suggested that an improvement in demand from export clients underpinned the latest rise in new orders.
Higher new order volumes contributed to a strong rise in production at Spanish manufacturing firms. Output has now risen in each of the past 49 months and the latest expansion was sharper than the average for the current growth period. The rate of job creation in the Spanish manufacturing economy remained robust in March, despite easing for the second month in a row. Anecdotal evidence suggested that staff were hired as part of efforts to expand production and to attract new business.
Spanish manufacturing firms faced a further sharp rise in input prices in March. Thirty-eight percent of firms indicated that costs had increased, with firms noting higher raw materials and plastics prices in particular. Increased input costs underpinned a further rise in output charges. The rate of charge inflation was marked, although well below the series high recorded in February.
Input buying at Spanish manufacturing firms rose at a robust pace in March.
