October 1, 2015

After hitting the lowest level on record in July, the Markit manufacturing Purchasing Managers’ Index (PMI) continued August’s movement to gain back some lost ground in September, rising for the second month in a row. The manufacturing PMI increased from 39.1 in August to 43.3 in September. Despite the increase, the index still remains far below the 50-threshold that separates contraction from expansion in the manufacturing sector.



According to Markit, September’s reading was driven by an improvement in the pace of contraction in production; however, the contraction was still significantly large. In addition, the fall in new work eased in September, although it remains one of the sharpest in the survey’s 16-year history. Employment in September fell for the sixth consecutive month, but at a more moderate pace compared to August. Regarding prices, input costs rose again in September. Markit analysts commented that, “September data indicated that Greek manufacturers experienced the harsh effects of the ongoing capital controls implemented by the government. Latest survey data signalled a further contraction in output, as incoming new orders suffered from the strict austerity measures in place across the country.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 9.1% in 2015, which is down 2.7 percentage points from the previous month’s estimate. For 2016, the panel expects fixed investment to contract 8.0%.