Spanish factory activity resumes in May, costs rise -PMI

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MADRID (Reuters) – Factory activity in Spain accelerated in May, a survey showed on Wednesday, although rising production costs and geopolitical uncertainty weighed on business sentiment.

S&P Global’s Purchasing Managers’ Index (PMI) for the manufacturing sector came in at 53.8 in May, down from 53.3 in April and 54.2 in March and still comfortably above the mark 50.0 which separates expansion from contraction.

“Pricing pressures remained considerable, while production expectations were dampened somewhat by concerns over inflation and geopolitical uncertainty,” S&P Global said in a report.

“Panelists indicated that they had little choice but to pass on their increased costs through increased ex-factory prices, but this was having a negative impact on sales,” the report said. S&P Global economist Paul Smith in the report.

Rising inflation and war-related uncertainty in Ukraine prompted Economy Minister Nadia Calvino to cut her economic growth outlook for this year to 4.3% from 7% after growth slowed than forecast of 5.1% in 2021.

Spain’s central bank also cut its growth forecast for the year to around 4%.

(Reporting by Inti Landauro; Editing by Catherine Evans)

Copyright 2022 Thomson Reuters.

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