Greece: Manufacturing PMI falls in July, points to stumbling recovery
August 3, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) dropped from 49.4 in June to 48.6 in July, erasing some of June’s gains and ending the improving trend since April’s historic low due to the coronavirus lockdown. Accordingly, the PMI fell further below the critical 50-threshold, indicating a deterioration in operating conditions in the manufacturing sector. That said, July’s result was still notably above April and May’s levels, when the economy felt the brunt of the pain from Covid-19 containment measures (April: 29.5; May: 41.1).
July’s downturn was driven by larger drops in new orders and output, with firms commenting that the pandemic continued to dent demand. The decline in new orders was widespread, with orders falling from both abroad and at home. In addition, weak demand caused firms to work through back orders and lower input buying. Meanwhile, firms also shed jobs in the month, but at a softer pace than in June. Lastly, businesses turned notably less optimistic in July, although sentiment still remained positive overall.