Galician industry is already preparing for recession: “This bubble will not last long”

Away from the factories, economists also confirm a complex picture: If the probability of a recession in the eurozone was 20% before the invasion of Ukraine, the level has now risen to 60 points, according to a panel of Bloomberg experts announced this week. It had not reached a similar level since the violent third wave. covid pandemicin the winter of 2020.

The positive rating is provided by the purchasing department. better performance of raw materials such as steel or fuels. “We were close to 2,000 euros per tonne of steel at the beginning of summer and are now under 1,500 euros,” the same sources linked to shipbuilding said. Indeed, the futures prices of major commodities show a singular decline in aluminum, copper or tin (the reference indicator for oil price in Europe) in addition to Brent.

What intermediate goods segment does not seem to be getting cheaper. “There has been no reduction in components and is not expected. There’s still a long time [de entrega] in engines, electronics and vending machines”. Therefore, industries such as the automobile industry will continue to face bottleneck problems mainly due to the lack of semiconductors (chips) and changes in production. The Stellantis Vigo plant produced less than 200,000 vehicles until June, the lowest figure since the double recession (2008-2011).

North America JP Morgan, in a new study on this component, predicts outages will decrease in the second half of the year for two reasons: improvement in productive capacity and lower demand for personal and home technology (computers, mobile devices). phones or consoles). Even if, giant volkswagen It excludes a complete normalization of the market by 2024.

more factors

Although the reduction in raw material costs acts as a tailwind for large industry, there are many more negative factors or uncertainties. For example, a “high bank loan cost”, likewise their peers in the food industry. “We are seeing a slowdown not only in Europe but even more significant in China. And they are in a technical recession in the United States,” recalls this frozen fish manager. A technical recession occurs for two consecutive quarters, with declines in quarterly GDP (gross domestic product).

“Unlike the USA, where the same businessman consults, there is high inflation here due to raw materials. If there is little rain at the end and there is no hydraulic production, then there will be a huge energy mess.”. The industrial lung of Germany and Europe were mainly affected. “Southern countries will come to us with debt cuts from the second half of 2023.” The European market is by far the main customer of Spanish companies.

Unlike previous periods of recession or paralysis of the economy, the order book of Galician companies is full. “In our case, the level of orders is very high and an opinion shared with many other companies”, they abound in the shipping industry. “The main challenges are delivery times and logistics, which are at astronomical prices.”. Awaiting a possible contraction in household demand in the summer season, automobile and fish prices remain very high. However, excluding fuels, the probability of the storm in short-term inflation easing (closed at 11.5% in Galicia in July) is zero.