ECONOMY

January industrial output held back by mining drop

Greek industrial production fell 0.3 percent in January as sharp declines in mining and energy output canceled out a strong gain in manufacturing production. The drop in January industrial output followed robust growth of 5 percent in December and 2.7 percent in November on the back of sharp gains in manufacturing production. Strong increases in the production of medical instruments, furniture, coal and non-metallic minerals lifted manufacturing output by 4.3 percent, provisional data released yesterday by the National Statistics Service showed. Manufacturing production started picking up speed in November, increasing 0.3 percent, and then surged ahead by 4.9 percent in December. The blip in January industrial output came after mining and energy output fell by 6.3 percent and 8.2 percent respectively. EFG Eurobank economist Platon Monokroussos said bad weather at the beginning of the year was partly to blame for the industrial output drop. «Bad weather in many areas of the country in January kept workers away from work,» he said. Rising geopolitical uncertainties have also eroded industrial confidence, causing companies to hold back their investment programs. Monokroussos said the increasing global tension and weak growth in Greece’s major trading partners make it unlikely that industrial output will pick up in the coming months. The European Commission early this month said eurozone growth in the first quarter may shrink by 0.1 percent. The European Central Bank also lowered its full-year growth forecast to around 1 percent. «The outlook is uncertain in the short term,» Monokroussos said. The latest economic readings also indicated a rocky road ahead. The Greek purchasing managers’ index in February rose by the slowest rate in a year as winter storms disrupted production and order levels in February. Greek industrial confidence in February hardly budged from the previous month’s level, the European Commission’s economic sentiment indicator for February showed. Greece’s long-term prospects, however, hold out more promise. «The strong growth rate forecast for this year and the 2004 Olympic Games are expected to bolster certain segments of the economy,» said Monokroussos. The government on Thursday reiterated its target of 3.8 percent economic expansion this year, despite rising geopolitical uncertainties. The Bank of Greece also issued a 3.7 percent forecast, citing strong private consumption and investments as the driving force for growth. The National Council of Exports is due to convene on Monday to discuss ways to bolster sales of Greek products abroad.