Greek PMI drops to nine-month low in July

The return to growth of the manufacturing sector proved short-lived, as the Purchasing Managers Index (PMI) dropped to a nine-month low in July to 48.7 points, against 49.4 points in June, according to Markit Economics.

The survey’s report attributes the decline to two main factors – shrinking production and an accelerating reduction to new orders in the sector. Production put an end to the upward course that began in November 2013. While output levels in consumer goods rose, this was offset by the weakening of production in other domains.

There was also a decline in new orders for the domestic market, while new orders for exports grew for a third consecutive month in July. Albeit rather moderate, the increase to new orders for exports has been the biggest of the last three years.

“This third straight increase in new orders for exports allows for the possibility of a return to growth,” Markit economist Phil Smith commented.

“Without a doubt it would be particularly useful if pressure on costs remained low, given that any notable increase in prices would simply undermine the competitiveness of Greek producers,” Smith added.