ECONOMY

Greek manufacturing suffered further slump in March, PMI shows

Greece’s manufacturing slump deepened in March as new orders shrank again, with the impact of the crisis in Cyprus yet to take its toll on the local economy, a survey showed on Monday.

Markit’s purchasing managers’ index (PMI) for Greek manufacturing, which accounts for roughly 15% of the economy, dropped to 42.1 points in March from 43.0 points in February.

The index has held below the 50 point line dividing growth from contraction since September 2009, just before the country’s fiscal problems came to light.

“After rising in the opening two months of the year, the headline PMI dipped in March, largely reflecting faster declines in both output and new orders,» said Markit senior economist Phil Smith.

“Eyes now turn to next month’s release for an early insight into whether developments in nearby Cyprus have impacted business and consumer confidence,» he added.

Firms saw another fall in new orders in March, accelerating from the previous month, as demand in the economy slumped.

But new orders from abroad fell at a much slower rate, and the seasonally adjusted index for new export orders climbed to an 11-month high.

Fiscal austerity is expected to keep the economy in recession for a sixth straight year in 2013, with the government projecting a 4.5% contraction in gross domestic product on top a 20% GDP shrinkage over the 2008-2012 period.

Reduced workloads and spare capacity forced manufacturers to shed staff at the fastest pace this year. The official unemployment rate stood at 26% in the fourth quarter.

[Reuters]