BUSINESS

Greek factory activity contracts faster in May as new orders fall

TAGS: Economy, Business

Greek manufacturing activity shrank for the fourth month in a row in May as a big drop in new orders was accompanied by job losses and a fall in production, a survey showed on Wednesday.

Markit's Purchasing Managers' Index (PMI) for manufacturing, which represents about 10 percent of the Greek economy, fell to 48.4 points in May from 49.7 in April, its lowest reading since November 2015. Readings below 50 denote contractions in activity.

"The fall in demand for Greek goods, from both domestic and international markets, continued to take its toll on goods producers and remains a key roadblock for future economic recovery," said Markit economist Samuel Agass.

The decline in new orders quickened to its fastest pace in eight months, with some firms linking it to financial instability in the economy. New export orders declined for the 18th time in the last 19 months.

About one-fifth of manufacturers reported a drop in their work backlogs, leading them to cut jobs overall, albeit it only very slightly.

Producers saw the sharpest rise in input costs since August last year, driven by higher raw material prices, especially for steel and plastics. Despite these higher costs, firms lowered their own product prices. [Reuters]

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