Closures, layoffs and stoppages: the industry suffers a fall already in July and anticipates a recession in the fall

• The industry registers the largest contraction since the pandemic in July: "Sales have plummeted"

Discouragement has spread in

in the month of July, in which orders have plummeted and prices have continued to rise, which has led the

to

,

, release warehouse stock and even, in some cases,

, as has happened with the Galician company

.

This contraction has been reflected in the

, prepared and published this Monday by the rating agency Standard & Poor's, which stood at

in Spain , the lowest level since

, when the country He was going through the toughest times of the pandemic.

This also means that for the first time in a year and a half the index is below 50 points, the limit that defines the difference between growth and contraction, something that has also happened in other countries such as

The economic slowdown in the euro zone manufacturing sector worsens in July as

.

In the case of

, they acknowledge that the sector "experienced the

in more than two years in July. The companies surveyed reported that

due to an increasingly uncertain environment, and some companies

High prices also weighed on demand, while similar factors also led to a comparable decline in new export orders."

The lack of orders prompted companies to cut production - the biggest decline since January 2021 - in response to a decrease in their workload, to reduce their warehouse inventories and to

.

"The level of employment fell for the first time in seventeen months," says S&P, something that could be confirmed on Tuesday when the Ministry publishes the data on enrollment and unemployment.

"

about the continuation of the economic recession in the coming months and, therefore, are taking increasingly defensive positions, as evidenced

" , highlighted

director of economics at S&P Global Market Intelligence.

Jennifer McKeown,

Head of Global Economics at UK consultancy

, said: "July's drop in the global manufacturing PMI is further evidence that

and forward-looking indicators point to

production indices all fell in July to hit their lowest levels since early 2020. Both indices now suggest

in line with a continued deterioration of production and also of

which until now had stagnated instead of falling".

"This Monday's PMI data points for the first time to a

", agrees

, chief economist for Spain at

while the economist

has warned in statements to Efe that he sees a "complicated panorama" and that "

."

"The problem is that there is a lot of uncertainty: the war in Ukraine, inflation (...). If people do not have disposable income, they consume less, demand drops and when demand drops, companies produce less," he added.

Gregorio Izquierdo,

director of the

(IEE), points out in statements to EL MUNDO that "

at the end of the year

, although it cannot be ruled out that there is a specific quarter with

."

"The risk and contingency factors for a

scenario would be the direct and indirect negative effects derived from a hypothetical

next winter and/or a

much greater than that announced as as a consequence of the entrenchment of the inflationary shock As a consequence of this context, a possible slowdown in our cycle is expected from the last quarter of the year, which will not necessarily manifest itself in a recessionary scenario, among other reasons due to the greater weight of the services sector in our country whose volatility is expected to be less than that which

which can foreseeably be the most affected in a hypothetical scenario of energy supply restrictions", he points out.

Contingency plans

The employers' association of small businesses,

, also warned on Monday that companies are activating contingency plans to deal with the sharp increase in costs.

"Companies have already begun to take measures, such as

in the face of rising energy prices,

, even with

of part of their chains, and adjusting stocks," they pointed out. .

The most affected sectors are those with

such as the

the employers said, although it is also observed that smaller companies in the hospitality sector, the manufacturing and agri-food industry , as well as agriculture and livestock are also implementing contingency plans.

An example of this impact is that of the

alumina refinery in San Cibrao (Lugo), which has reduced its production since Monday "to mitigate part of the losses caused by the high prices of natural gas, which continue to climb in Spain" .

Specifically, the company will cut its production over the next two months until it reaches between

of its annual capacity," as reported in a statement.

This operating level adjustment includes the

.

At the current cost of natural gas, the refinery makes a negative margin or loss for each ton of alumina produced.

With the recent 15% reduction in production, Alcoa estimates the plant would lose approximately $75 million in the third quarter.

Operating at 50% capacity, at current natural gas prices in Spain, refinery losses will be reduced by approximately one third.

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