Greece PMI


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.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 2.0% in 2015, which is up 1.0 percentage points from the previous month’s estimate. For 2016, the panel expects fixed investment to increase 4.6%.

Author: Angela Bouzanis, Senior Economist

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Greece PMI Chart

Greece PMI April 2015

Note: Markit Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector, while readings below 50 point to a contraction
Source: Markit

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