The slump in Greek manufacturing output in Januaryshows that the country is still buried deep in recession.
Markit’s senior economist, Paul Smith, warned that the country is trapped in a vicious circle, as austerity measures choke demand out of the system. With unemployment rising and consumer spending, firms are rporting that they are struggling to access working capital.
Manufacturing output across the eurozone also fell in January, for the sixth month running.
Markit’s overall PMI came in at 48.8, up from 46.9 — which means that the sector kept shrinking, but at a slower pace.
While Germany returned to growth (see 8.53am), the picture in Greece was dreadful.
Greek manufacturing output slumped to just 41 on Markit’s scale, down from 42 in December. New orders took a dive, and firms also reported that their work backlogs had also dropped.The first European manufacturing data is in — and it’s more more good news for Germany, and bad news for many other European countries.
The German manufacturing sector returned to growth in January, with a PMI of 51 (according to data from Markit). That’s a recovery from 48.4 in December, and means Germany’s manufacturing sector expanded for the first time since September.
But French and Italian manufacturing output both declined for the six month in a row.
France’s PMI dropped to 48.5 [a reading of 50 separates expansion from contraction] from 48.9. Italy’s rose from 46.8 from 44.3, indicating that its industrial sector kept shrinking but at a slower rate.
Switzerland and the Czech Republic also suffered another drop in manufacturing output.