Factory price incomer breaker in Spain

Following turmoil on energy markets in 2021 and 2022 caused by the COVID pandemic and then the start of the Ukraine war, industrial price growth in Spain peaked at 47% in March 2022. Companies tend to pass on industrial price rises to customers, ultimately fuelling inflation.

Did you know...? The Industrial Price Index (IPRI) is a short-term indicator that measures the monthly evolution of the prices of industrial products manufactured and sold in the domestic market, in the first step of their commercialisation, that is to say, at ex-factory prices, excluding transport and commercialisation costs and invoiced VAT.

Specifically, based on what we have seen in the previous section on the contributions of different HICP components to the inflation rate recorded in Spain over the last few years, we will consider the following six "economic sectors of interest": energy, food, tourism, rest of industry, rest of services and construction (Table 1). Table 1.

In February, industrial production recorded a decline of 1.9%, following a revised contraction of 1.2% in January, marking a deepening of the slowdown. Having long outperformed its northern eurozone peers, the manufacturing dip now also seems to be affecting Spain, exemplified by an 11% decline in February in the automotive sector.

See the Appendix for more details. There are two basic types of electric tariffs in Spain. The first one is a regulated tariff (called the Voluntary Price for the Small Consumer, or PVPC), whose price is adjusted daily to the evolution of the wholesale market.

It clearly shows that the average markup set by firms in Spain has strongly increased during the current inflationary period, and it was above its historical average in 2023 (14.7% versus 11.7%) 12. Fig. 10. Aggregate markup Nevertheless, Fig. 11, Fig. 12 allow us to see sectoral heterogeneity in the behaviour or markups over the last years.