The Manufacturing Purchasing Managers’ Index (PMI) paints a very worrying picture for the Greek economy, as its August reading was 39.1 points, considerably lower than the stability level of 50 points and one of the lowest levels ever recorded by index compiler Markit Economics.
The data reveal a considerable reduction in output compared with July, following seven consecutive months of decline. Employment in Greek manufacturing may have dropped at a slower pace in August than in July, but it was still the second fastest ever recorded in the survey.
The capital controls were cited as the main reason for the further increase in the cost of imports in August, while supply delivery times continued to grow as a result of the weakened demand in the sector. This drop in demand from both the domestic and international markets means that manufacturers have struggled to reach new deals.
Furthermore, this week, the listed Viohalco Group announced a temporary halt until September 15 in operations at its Sidenor plant in Thessaloniki, suspending its entire staff for two weeks. This follows the suspension of operations at the group’s Sovel plant at Almyros, central Greece, from August 20 to September 15.