Greece: Manufacturing sector weakens in April
May 2, 2018
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) declined from 55.0 points in March to a five-month low of 52.9 points in April. Nonetheless, the index remained comfortably above the critical 50-threshold that signals expansion in the manufacturing sector.
The moderation in April was broad-based. New order growth softened, and consequently output eased. Employment growth softened from March’s historic high, but remained strong nevertheless. Stocks of inventory also rose slightly. In terms of prices, input price inflation weakened but remained elevated due to higher raw material costs, and output prices rose in response.
Although new order growth was weaker, April represented the ninth consecutive month in which new work order expansions and foreign orders continued to rise, which points to the overall strength of the manufacturing sector in comparison with historical averages. Furthermore, despite the drop in the headline figure, business confidence soared to a new record high in April, buoyed by supportive financial conditions and solid export demand.
Alex Gill, Economist at IHS Markit, commented:
“The slowdown was broad-based […] Nevertheless, the more forward looking indicators continued to highlight some positive signs, with business confidence and employment growth the sharpest and third-sharpest on record respectively, perhaps suggesting firms expect growth to continue in the coming months, albeit to a weaker extent than in Q1.”
Author: Lindsey Ice, Economist