Greek PMI at 51 points in May as eurozone manufacturing slows

Greece’s manufacturing remained in growth territory in May, although the Purchasing Managers’ Index (PMI) fell slightly to 51 points, according to London-based Markit.

The PMI was at 51.1 in April. “The PMI remained on the right side of the 50.0 mark in May, signalling steady albeit unspectacular growth at factories,” said Markit analyst Phil Smith.

“A better performance on the export front aided increased sales in the domestic market, with the resulting overall pick-up in new orders leading firms to raise production levels as well as employment.”

Smith added that demand would need to be strengthened for the index to keep rising.

“For the current pace of output growth to be maintained, however, the data suggest the need for a further strengthening of underlying demand, as production in May was to some degree supported by progress on backlogs of work and discounting was still being widely used to retain business,” he said.

At a eurozone level, manufacturing slowed more than initially estimated in May amid weakness in France, adding to evidence of the region’s uneven recovery as the European Central Bank weighs more stimulus to shore up growth and inflation.

The PMI fell to 52.2 last month from 53.4, below a May 22 preliminary reading of 52.5. The recovery in the 18-nation region is struggling to gather pace amid sluggish bank lending and annual price gains of less than half the ECB’s goal. Policy makers meeting in Frankfurt on June 5 have said they’re prepared to present a package of stimulus measures if new forecasts show growth and inflation will stay too low for too long.

The survey “will inevitably add to the clamor for policy makers to provide a renewed, substantial boost to the region’s economy and ward off the threat of deflation,” said Chris Williamson, chief economist at Markit in London. “However, the case is not so clear-cut.”

[Kathimerini & Bloomberg]