Greece PMI


Greece: PMI recovers from record low in August, but remains deep in contractionary territory

September 1, 2015

After hitting the lowest level on record in July, the Markit manufacturing Purchasing Managers’ Index (PMI) rose in August, increasing to 39.1 (July: 30.2). Despite the increase, the index still remains far below the 50-threshold that separates contraction from expansion in the manufacturing sector and at one of the poorest readings in the index’s history. Moreover, August’s poor reading signals the negative impact that the increased political uncertainty surrounding Greece’s debt crisis had on the economy.

According to Markit, August’s poor reading was driven by a sharp drop in production and absence of new orders. Employment in August fell for the fifth consecutive month, however at a more moderate pace compared to July. In addition, post-production inventories fell partly due to a lack of raw materials, although at a softer pace than in July. Regarding prices, input costs rose in August, which survey participants cited as due to the impact of capital controls. Markit analysts commented, “overall, the headline PMI reading paints a disconcerting picture of the health of the Greek economy, as uncertainty builds around the nation’s future political and financial position.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 6.4% in 2015, which is down 1.3 percentage points from the previous month’s estimate. For 2016, the panel expects fixed investment to increase 6.9%.

Author: Angela Bouzanis, Senior Economist

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Greece PMI Chart

Greece PMI August 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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