In July, it fell below the 50-point barrier, indicating a recession. indicator of responsible purchasing in productionKnown as PMI index, as there was a decline in production and, even worse, a decrease in orders both from the domestic market and from abroad. Although S&P Global, which makes up the index in question, still maintains a positive trend in its rate. industrial production in Hellas for this year as a whole, with a slightly upwardly revised outlook from May, the signals from the manufacturing sector are extremely worrisome, especially given that the PMI is seen as a harbinger of the course of the economy as a whole.

In particular, according to data published yesterday S&P Global, PMI fell to 49.1 in July from 51.1 in June. In fact, this value is lower than recorded in February 2021 (49.4 points), when the last time the PMI index fell below 50 points, but this development was associated with a pandemic that was still in full swing, and both in Greece and many other countries have been suspended most of the economic activity. It should be recalled that after last year’s continuation, Greek production has registered a strong upward trend, recording double-digit growth rates both in terms of production and in terms of turnover.

In addition to the decline in production, the PMI index also records a decrease in orders both in the domestic market and from abroad.

The fall in production for the second month in a row contributed to the overall decline. Production cuts accelerated to their sharpest pace since the end of 2020 as companies said declining new order inflows and tight demand conditions have reduced production needs. New orders fell sharply in July, in stark contrast to the strong growth seen earlier this year. The rate of contraction rose to the highest since December 2020 as businesses stressed that strong inflationary pressures have reduced customer purchasing power. At the same time, demand from overseas customers continued to decline. New export orders fell at the sharpest pace in a year and a half.

Perhaps most worrisome is the lack of hiring, or worse, downsizing in the manufacturing sector, as S&P Global analysis points to a bloated staff. Overall manufacturing employment grew, albeit marginally, at the slowest pace since February 2021. However, some companies have reported a reduction in the number of employees, which means either layoffs or refusal to hire, mostly seasonal workers.

However, there are two positive elements, the first of which is that it is not known how long it will last, and the second is quite risky. In particular, one positive development is that the pace of cost growth has slowed down. However, no one can rule out a new round of assessments. On the second positive note, production expectations for 2023 improved in July. However, if the war in Ukraine goes on too long and a new outbreak of the pandemic occurs, no one can rule out a general downturn that will cause production cuts.