The reading still points to a decent expansion in Spain’s manufacturing sector but there are some key challenges. Supply constraints and surging price pressures continue to be a thorn in the side, resulting in slower growth in new work, persisting capacity pressures, and a sharp rise in backlogs. Markit notes that:
“Supply-side challenges persisted during December and
continued to have a major impact on a variety of metrics
tracked by the PMI survey.
“Prices indices remained extremely high, with firms
signalling severe inflationary pressures that were having
a detrimental impact on client demand. New orders
subsequently rose at a more modest rate.
“Moreover, input shortages placed some restriction on
productive capabilities, and firms continued to scramble
to source inputs and bolster stocks wherever possible.
Such pre-purchasing of goods is likely exacerbating
pressure on already strained supply-chains.
“These difficulties continue to undermine confidence,
although firms believe that over the coming year
underlying trends in output and demand will be positive.”