ATHENS, Aug 3 (Reuters) - Contraction of Greece's manufacturing sector continued to slow in July with the purchasing managers' index (PMI) rising to 48.8 points from 47.7 in June, a monthly survey of manufacturers showed on Monday.
The data reflected the weakest deterioration in Greece's manufacturing economy in the current sequence, with production levels and new orders stabilising. The improvement in business conditions stemmed from the domestic market as new work from abroad shrank at an accelerated pace. July's reading was the highest for the PMI index since last October, although data still showed a monthly contraction. The 50 point mark separates contraction from growth.
The seasonally adjusted PMI composite indicator provides a single-figure snapshot of the performance of the manufacturing sector.
Job shedding across Greece's manufacturing industry slowed to a marginal pace in July.
"As economic conditions remained difficult in July, Greek manufacturers continued to follow stock-depletion initiatives, meeting production requirements and sales with existing holdings of raw materials and finished goods," Markit said.
For the first time in 10 months Greek manufacturers reported a rise in their average input cots. Raw materials were the primary source of inflation -- prices of olive oil, plastics, polymers and solvents were particularly mentioned.
Still, the rate of increase was subdued by historical standards.
Manufacturers were unable to pass through their increased cost burden to customers in July as competition and weak demand continued to restrain pricing power.
The index for new orders fell to 49.4 from 49.8 in the previous month. (Reporting by George Georgiopoulos; editing by Stephen Nisbet)