Spain’s industrial turnover shows ongoing decline across sectors
The turnover in Spain’s manufacturing sector decreased by 8.7% from June last year to June this year, according to the National Institute of Statistics (INE). The overall index is now 33 points higher than the level recorded in June of the pre-COVID year. This marks the third consecutive month of decline, indicating that industrial activity remains weaker than in the same period before the pandemic, with a drop not seen since the summer of 2020.
On an annual basis, the decrease stands at 8.7% after accounting for seasonal and calendar effects, or 7% when using the original series. In either scenario, the decline is driven by lower energy sector activity. Month over month, industrial turnover fell by 2.8% in June compared with June of the previous year.
Statistics released on Wednesday show that the energetic segment of the industry, covering crude oil extraction, natural gas, coke plants, and oil refineries, reduced turnover by 40% year over year in June 2022. This represents the fourth consecutive month of negative year-on-year figures, coinciding with a period when energy prices were easing. Electric power and gasoline prices have drifted toward pre-war levels in Ukraine, a factor contributing to the higher costs faced by consumers elsewhere in Europe.
Joan Batalla, president of the Sedigas employers’ association, commented that a milder winter and European responses to the war in Ukraine helped stock levels build up. He noted that underground storage was high for the time of year, which dampened demand and activity across the sector.
Within the sub-sector, March saw an 18% year-over-year drop in activity, followed by a 30% decline in April, nearly 40% in May, and a further 40.8% in June.
Durable consumer goods and intermediate goods
The weakness extended beyond energy. Factories producing durable consumer goods performed worse than a year earlier, with volumes about 5% below the unadjusted index for calendar effects. Intermediate goods also showed a deterioration, roughly 12% below the prior year level.
In durable consumer goods, sectors like jewellery, bijouterie, and musical instruments fell by 13.9%; home appliance manufacturing dropped 11.7%; and the manufacture of motorcycles, bicycles, and other transport modes declined by 11.4%. Among intermediate goods, the chemical industry (excluding cleaning, cosmetics, and perfumery) fell 24.6%; iron, steel, and ferroalloy products dropped 22%; and the wave paper industry fell 15.2%, among others.
However, the picture is mixed. Some segments showed notable growth, including electronic component manufacturing increasing by 25.7% and the tobacco industry rising by 21.4%. Growth followed the output in electronic materials and equipment, motor vehicle and trailer manufacturing, and computer hardware, among others.
The service sector records its first decline in two and a half years
Service sector activity also contracted. INE data indicate that the turnover of the services workforce, including retail, transportation, hospitality, and administrative services, fell by 0.9% in June compared with the previous year. This marks the first negative rate in two and a half years. In particular, wholesale trade faced a downturn, as did transport and storage, with declines of 3.2% and 5.6% respectively.
Seasonal patterns could influence these figures. Wholesale trade of agricultural raw materials and live animals dropped by 12.4% in the original series. Storage and transportation activities declined by 12.7%, while in information and communication, cinema, television, and music broadcasting fell by 27%.