March Manufacturing PMI Expansionary For Second Consecutive Month

The Spanish March manufacturing PMI came in above expectations at 51.4 (vs 51.0 cons, 51.5 prior), with stronger demand evident in the survey, alongside mixed inflation developments. The Spanish PMI continues to outperform its Eurozone-wide equivalent, which saw a March flash release of 45.7. Bunds reacted negatively but the move was limited.

Key notes from the release:

• "Output growth accelerated in March to its highest level for a year amid reports of an increase in new order book volumes".
• "Panellists commented that sales increased on the back of improved market demand, especially from abroad".
• "To help service higher production requirements, firms bolstered their purchasing activity".
• "Companies noted that extra staff were being hired to help service greater production requirements and in anticipation of growth".
• "Input prices increased again in March, marking back-to-back rises in manufacturing input expenses"..." Higher prices were linked in part to product shortages and delivery delays"...."There were reports from panellists that complications in the Red Sea and, by extension, the Suez Canal had led to delivery delays".
• "Output charges continued to fall"..."Companies that signalled a drop in charges reported that the business climate remained competitive and characterised by relatively underwhelming demand".