Spanish factory output growth picks up in March -PMI

MADRID, April 3 (Reuters) - Factory activity in Spain grew in March for the second month in a row, with the strongest expansions in output and employment in over a year amid a drop in inflationary pressures, a survey showed on Monday. S&P Global's Purchasing Managers' Index (PMI) for Spanish manufacturing rose to 51.3 last month from 50.7 in February. The 50.0 mark separates growth from contraction. February's expansion was the first since June last year. "March's PMI survey provided a whole host of positive news with regards to the Spanish manufacturing sector," said economist Laura Denman of S&P Global Market Intelligence. She added that "perhaps the most pivotal findings within the latest survey came from the first improvement in vendor performance and the first fall in average operating expenses since November 2019 and July 2020, respectively", expecting further alleviation in these pressures over the coming months.

The rate of selling price inflation was the softest in 28 months, the survey showed. Spain's consumer price inflation slowed sharply to 3.3% in March, its weakest annual rate since August 2021 and down from 6.0% in February, preliminary official data showed on Thursday. However, while new orders grew in Spain, export orders declined for the thirteenth consecutive month and at a stronger rate than in February, S&P Global noted. Spanish economic growth is expected to slow this year. The government has forecast an expansion of 2.1% after 5.5% in 2022, while the central bank and many analysts expect growth to be even slower. (Reporting by Andrei Khalip; Editing by Toby Chopra)