Parón in the Spanish industry: production, orders and employment fall, and confidence collapses

• Companies multiply their queries to make labor restructuring in the face of uncertainty

• The Spanish economy stops growing when it is still 2% below the pre-pandemic level

The

has registered in the month of October the

since the worst moments of the

, in the

and before that since the debt crisis in the Eurozone in 2012.

This is reflected in the

, published this Wednesday by S&P, which stood at

.

"Declining sharply from

, the index marked its lowest level since May 2020";

explains the company.

In fact, the index has been for the fourth consecutive month below the level of 50 points, which marks the difference between economic expansion and contraction.

"The Spanish manufacturing sector experienced

as output and new orders declined at rates not seen since the height of the pandemic-related lockdowns in the spring of 2020. Job

in response to falling workloads, while

to its 29-month low.

Companies responded by drastically cutting purchasing activity and jobs, especially since there is currently no clear timetable for the crisis.

Paul Smith, Director of Economics at S&P Market Intelligence

Among the main concerns,

remained a concern for many businesses, although both prices paid and prices charged increased at much slower rates in October.

New orders sank

due to the

, which in turn considerably reduced the volume of production.

"Customer uncertainty and hugely challenging market conditions characterized the

, not only domestically but also overseas.

for the eighth consecutive month and did so at a considerable pace."

Fewer purchases and more layoffs

Faced with the drop in orders and the lower production needs, the companies took different measures.

On the one hand, they

since they needed less material and pulled from the stock they had in stock.

"Overall, raw material stocks fell at the steepest rate since February 2021. Finished goods stocks also fell sharply, falling at the strongest rate in sixteen months."

Keep in mind that

in anticipation of prices continuing to rise, to ensure that they were supplied at a lower price.

On the other hand, companies also

and, in fact, "

"A combination of excess capacity and growing pessimism about the future was reported to have had a

. In fact, backlogs fell sharply (also at the strongest pace since mid-2020), while the confidence in the future was at its lowest level since May 2020. Companies widely reported that the high degree of economic and financial uncertainty, high inflation and poor prospects for demand weighed on confidence," they explain.

Faced with this scenario,

, Director of Economics at

, warned of the "

in which the sector finds itself, since the generalized economic uncertainty and the impacts of high inflation are strongly affecting demand and industry results.

"

especially as

now . In fact, confidence in the outlook sank to its lowest in almost two years and average in October amid expectations that high inflation and economic uncertainty will persist in the coming months," he said.

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