Christian Horner says Mercedes' updated W14 has perhaps moved the German outfit up in the running order, but its performance gap to Red Bull hasn't changed.
Mercedes introduced in Monaco its revamped design, with the Brackley squad's developing their car away from its original 'zero sidepod' concept towards a more conventional design.
The changes, which also included a new front suspension, were put to the task in a more relevant environment last weekend in Barcelona where they proved beneficial with Lewis Hamilton and George Russell finishing on the podium behind dominant race winner Max Verstappen.
In the wake of Mercedes' strong performance, Hamilton expressed his hope that his team will be able to take the fight to Red Bull by the end of the year.
In the interim however, the bulls still hold a healthy lead over their rivals, starting with Mercedes.
"For sure they’ve made a step," Horner said in Spain. "They’ve introduced pretty much a B-spec car. They must have used a significant proportion of their development budget on that.
"And when I look at the gap at the end of the race it’s very similar to where it was in Bahrain. All that’s happening is the running order behind us seems to vary from race to race.
"Fernando [Alonso] last weekend, Mercedes this weekend and it’ll be interesting to see how that plays out over the next few races."
However, Red Bull's development pace has been reined in by the aerodynamic testing restrictions (ATR) imposed by the FIA as a result of the team's victory in the 2022 Constructors' championship and its breach of the sport's cost cap rules in 2021.
"We’re strategically using the ATR because of course we have to balance it for this year and for next year with the development that is currently going on," Horner explained.
"So the team are just doing an incredible job being extremely efficient. You can see we’ve very subtly developed the car since since Bahrain.
"We’ve seen others bring in significant upgrades now and the margin has remained pretty much the same from where it was in Bahrain.
"That’s hugely encouraging to everybody in Milton Keynes, who is doing an outstanding job at the moment."
Red Bull motorsport boss Helmut Marko echoed Horner's view, but believes that the jockeying for position behind Red Bull Racing on race weekend's is helping the latter.
"The updates of our competitors have only brought a shift [in their running order]," Marko told OE24.
"But without wanting to be arrogant, they didn't really get closer to us, they just took turns [at being second-fastest]. And that's good for us again, because our lead in the Championship is getting bigger with every race."