Greece: PMI falls deeper into contraction territory in April
May 4, 2015
The Markit manufacturing Purchasing Managers’ Index (PMI) fell from 48.9 in March to 46.5 in April, which marked a 22-month low. As a result of April’s decline, the index is further from the 50-threshold that separates contraction from expansion in the manufacturing sector.
According to Markit, new orders decreased for the eighth straight month, weighed down in particular by falling new export orders as clients abroad are worried about the political situation in Greece. Production levels decreased again in April, both intermediate and capital goods output fell at a faster rate than last month. However, consumer goods output increased, although at a weaker pace. Employment swung back to contraction in April, after having increased in the previous month. In addition, cost inflation hit a 10-month high in April, against a backdrop of higher prices for raw materials and a weak euro. Despite the rise in inflation, output charges were lowered as producers attempt to increase sales. As added by Markit, “[t]he ongoing downturn in Greece’s manufacturing sector reached a new low in April, with the PMI survey showing factory production falling to the greatest extent for nearly two years. Underpinning this was weak demand amid uncertainty towards the political and economic outlook of the country.”