ECONOMY

Manufacturing growth slowdown

Greek manufacturing growth slowed in June from May, although the sector still expanded, bucking the eurozone’s downward trend, a monthly survey showed yesterday. The Greek Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 51.0 in June from 51.7 in May, holding above the halfway mark of 50 that divides growth from contraction. «Operating conditions in the Greek manufacturing sector improved in June,» NTC Research, which compiled the survey, said. It added, however, that growth was weaker than in May. NTC said increases in output and new orders contributed to the rise in the overall gauge of Greek manufacturing conditions. It said input prices eased marginally in June, declining for the first time in 18 months, with the around 300 companies surveyed citing mainly lower costs of raw materials for the drop. The input price index eased to 49.4 from 50.1 in May. Greece’s service-oriented economy has managed to escape the manufacturing recession that has hit most of the euro area, the result of weak global demand and a stronger euro that made exports less competitive. The country’s economy is expected to grow by around 4 percent this year, around four times the eurozone rate, helped by investments ahead of the Athens 2004 Olympic Games and strong domestic consumption. Since May 1999, when the Greek PMI survey was launched, the manufacturing sector has experienced only three months of contraction, the last in the March-April period of this year. In the eurozone, the downturn in the eurozone’s manufacturing sector gathered pace in June as the euro’s recent strength cut demand for the region’s exports, according to a survey of around 3,000 companies. The Reuters Eurozone Purchasing Managers’ Index for manufacturing slid further below the 50 line that divides growth from contraction, sinking to 46.4 in June from 46.8 in May – well below the consensus forecast of 47.4. Output shrank at the fastest pace since January 2002 and new orders at the sharpest rate since December 2001. (Reuters)