PMI falls to low­est since Novem­ber

Financial Mirror (Cyprus) - - FRONT PAGE -

Greece’s Man­u­fac­tur­ing PMI fell by 1.6 points to 49.4 in June from 51.0 in May, ac­cord­ing to Markit.

This was the low­est read­ing since Novem­ber with the head­line fig­ure fall­ing back be­low the 50-point mark that sep­a­rates growth from con­trac­tion.

The de­te­ri­o­ra­tion re­flects weak­en­ing out­put growth amid a slight fall in new or­ders, while em­ploy­ment saw a re­newed de­cline. In ad­di­tion cost in­fla­tion ticked up to a ten-month high, but fac­tory gate prices con­tin­ued to fall.

The rate of growth in the out­put at Greek firms was the slow­est over the past three months mainly due to a slight dip in in­com­ing new work. The lat­ter had posted a rise in the pre­ced­ing six months and grew solidly in May. Nev­er­the­less, new ex­port or­ders rose mod­estly, yet at the fastest pace since Au­gust 2011.

Al­though the out­put growth was sus­tained in June mainly through progress on out­stand­ing busi­ness, the rate of drop in back­logs of work was the most marked over the past eight months.

Em­ploy­ment posted a re­newed de­cline in June af­ter mar­ginal gains in each of the pre­ced­ing two months. In ad­di­tion, the rate of job losses was solid sug­gest­ing an over­all de­crease in em­ploy­ment in the sec­ond quar­ter of the year.

At the same time, the quan­tity of items pur­chased by Greek man­u­fac­tur­ers recorded the first back-to-back in­creases in buy­ing lev­els since 2008, al­though the rate of growth was mar­ginal. Ris­ing pur­chas­ing ac­tiv­ity is mainly re­lated pro­duc­tion re­quire­ments.

In­ven­to­ries of out­put con­tin­ued head­ing south, while post-pro­duc­tion in­ven­to­ries dropped at a solid rate, al­though slower than in May.

Man­u­fac­tur­ers also faced a rise in aver­age pur­chase prices mainly due to an in­crease in oil and paper prices. The rate of the over­all in­put price in­fla­tion was the fastest over the past ten months.

In con­trast, con­tin­ued com­pet­i­tive pres­sures led out­put prices lower. Nev­er­the­less, the rate of de­cline was slower than in May.



Markit an­a­lysts con­cluded that: “Greece’s man­u­fac­tur­ing PMI fell back be­low the cru­cial 50.0 mark in June, dragged lower in part by slower growth in out­put. A slight fall in new or­ders un­der­pinned the loss of mo­men­tum.”

“An­other neg­a­tive de­vel­op­ment high­lighted by June’s sur­vey was a re­newed de­cline in man­u­fac­tur­ing em­ploy­ment. More­over, the ex­tent of job losses dur­ing the month was per­haps suf­fi­cient to wipe out the gains recorded ear­lier in the quar­ter, and is an­other re­minder that the sec­tor re­mains on a weak foot­ing,” Markit an­a­lysts stressed.

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