ECONOMY

Industrial production falls

Greek industrial production remained stagnant in the first four months of the year, indicating that robust economic growth has yet to diffuse into the broader economy and that businesses are finding it difficult to compete on the world stage. Industrial production in the January-April period edged up just 0.1 percent as an 8.8 percent decline in mine production and a 1.8 percent drop in manufacturing output offset a 6.5 percent jump in energy production. April reflected the same story of gloom as industrial production fell 0.1 percent, manufacturing output declined 2.8 percent and mine production dropped 2.3 percent. «Competitiveness, competitiveness, competitiveness, it’s the same story again,» said Christos Avramides, economist at Proton Investment Bank. «An example is the decision by Palco [garment manufacturer] to shift its operations to Bulgaria which shows the market is not competitive enough and at the same time not able to advance to the next stage of value-added growth industries,» he noted. He said robust GDP growth, 4.3 percent in the first quarter, has yet to disperse to the wider economy, with the exception of the construction sector and Olympic-related projects. Alpha Bank economist Dimitrios Maroulis said April industrial production was affected in part by the fewer number of working days due to Easter. He said bad weather, which caused inflation to spike up, also impeded production at factories and mines. Despite strong consumer spending, businesses preferred to wind down their inventories, as evidenced in the massive 14.7 percent drop in the production of capital goods in the first four months, said Maroulis. With its major trading partners mired in a downturn, Greek industrial production is not expected to pick up pace until the fall, Avramides forecast. Greece however could boost prospects by accelerating structural reforms, he said, echoing a call by the International Monetary Fund yesterday.