PPMMII ffaallllss aaggaaiinn iinn JJuullyy

The manufacturing PMI headed south for the second successive month in June, easing by 0.7 points to 48.7 in July from 49.4 in June, according to Markit.

This was the lowest reading since October 2013, pointing to a further deterioration in the overall business conditions in the manufacturing sector.

The renewed contraction reflects a decrease in the output levels, due to a further reduction in the overall new orders, although new export orders rose modestly. In addition, manufacturers cut both employment levels and quantities of purchases, while cost pressures were subdued.

Production in July decreased slightly partly offsetting the modest increase posted in June. In addition, it ended a series of continuous expansion since November 2013. Although consumer goods producers showed a rise in output levels, this was negated by weakness in the other sectors - particularly investment goods.

The rate of drop in July new orders was faster than in June, mainly reflecting weaker demand. Nevertheless, new export orders increased for the third consecutive month at a rate which was the most marked over the past three years, yet only modest overall.

Lower demand led to a reduction in staffing numbers for the second straight month, yet at a slower to June rate. Buying levels were also down pointing to the first drop over the past three months.

“The Greek manufacturing sector started the second half of the year in reverse gear,” according to Markit analysts.

“A third straight monthly rise in new export orders offers some hope that the upturn can be revived. It will undoubtedly help if cost pressures remain low as any appreciable rise in output prices will only act to erode Greek manufacturers’ competitiveness,” Markit added.