Spanish industrial production ticks up in May

Spanish industrial production partly recovered in May from a month earlier and there may be some scope for industrial activity to edge up further this year because of new economic measures approved by the Spanish government.

The country's industrial output fell by 27.8pc in May from a year earlier, the National Statistics Institute (INE) said this week. This was less than the drop reported a month earlier, when provisional data showed a drop of 33.6pc — which has now been revised to 34.1pc — from April 2019, the biggest fall since the institute started collecting industrial data in 1976.

"During May, the industry continued to recover its activity, after the paralysis of almost the entire fabric of industrial production in the first half of April," the institute said.

The start of the government's plan to phase out lockdown measures imposed to stop the spread of Covid-19 may have boosted industrial activity.

And some of the worst-affected sectors in April experienced the biggest recoveries in May. Output from the car manufacturing sector rose by more than 360pc after it fell the most in April, by 92pc.

In any case, industrial output once again decreased across the whole of the country from a year earlier, with the sharpest falls in the Balearic Islands — by 35.8pc — followed by Aragon and Galicia.

Low industrial activity continued to cut sharply into gas demand from the sector, resulting in Spain's industrial gas consumption plummeting in May to 14.5TWh from 17.8TWh a year earlier.

Industrial activity could edge up

But the further recovery of the Spanish industrial sector could be helped by new measures to encourage economic activity in the country.

The Spanish government recently signed an agreement with the country's largest industrial associations and trade unions to reactivate the economy, including an investment of €50bn.

The agreement also includes a "pact for the industry" aimed at Spain's "re-industrialisation for diversifying, balancing and modernising its productive infrastructure" and "boosting strategic sectors".

This follows a recommendation by the Confederation of Employers and Industries in April that the recovery of the economy would require the "reactivation of industrial production… with a focus on the traditional industry".

But some major industrial manufacturers have already announced the permanent closure of some of their Spanish plants, including Nissan's car manufacturing facility in Barcelona and Alcoa's San Cibrao metal factory in Lugo.

In any case, while system operator Enagas has not yet published data on industrial gas consumption for last month, conventional demand — which comprises residential and industrial users — already rose to 557 GWh/d in June from 533 GWh/d a month earlier.

By Silvia Fernandez Martinez