Greece’s July manufacturing PMI climbed to 41.9.This was slightly better than June’s 40.1.
Still, the number is horrific. A reading below 50 signals contraction in the industry.
Key points from Markit:
- Output, new orders and employment all fall at steep rates
- Input prices continue to rise, but output charges cut sharply
“Against the backdrop of recession and the ongoing financial crisis, the latest survey showed that operating conditions unsurprisingly remained tough for Greek manufacturers in July. Output, orders and employment all continued to fall, while the well publicised problems of liquidity and credit constraints remained a considerable barrier to purchasing and general demand in the sector.
“Margins also remained under considerable pressure as input costs rose further at a time when competitive pressures and poor demand led to heavy discounting.”
Greece continues to be a big problem for the euro area. Many don’t expect the debt-laden country to meet the deficit requirements to secure future bailout funds.
Last week, Citi’s Willem Buiter raised his odds of a Greek exit from the euro to 90 per cent.