BUSINESS

Greek factory activity grows for second straight month in July

TAGS: Economy

Greek manufacturing activity expanded in July for the second straight month, driven by a rise in staffing numbers and output, a survey showed on Tuesday.

Markit's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about 10 percent of the economy, stood at 50.5 in July, unchanged from June. Readings above 50 denote expansion in activity.

Companies hired more staff for the third successive month in July, leading the sector towards its second successive rise in output. The rate of expansion, though slight overall, was the most marked since December 2015. Business confidence was also a positive feature of the survey, hitting a 39-month high.

“Optimism was likely buoyed by the ongoing resurgence in the European economy, and will help boost investment spending going forward,” Markit economist Alex Gill said. “The country's return to financial markets in July may also provide some assistance on this front, at least in the short-term.”

While July's reading signalled only the second improvement in Greek manufacturing sector conditions since August last year, the rate of growth was marginal, Markit said.

“While any reading above 50.0 is welcome news at this juncture, the rate of growth remained precarious,” said Gill. “Indeed, with total new orders stagnating and foreign demand falling further, it is conceivable that the headline figure could slip back in August.”

The new orders subindex stood right on the 50.0 threshold dividing expansion from contraction in July, while new export orders fell for the 11th month in a row.

[Reuters]

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