Greek manufacturing activity shrinks faster in October, survey shows

Greek manufacturing activity shrank at a faster pace in October, suggesting the ailing sector is unlikely to recover this year, a survey showed on Friday.

The Markit index of manufacturing sentiment dipped to 47.3 in October from 47.5 a month earlier. It had hit a 44-month high of 48.7 in August, though that remains below the 50 point line dividing expansions in activity from contractions.

Manufacturing accounts for about a tenth of the Greek economy and has been shrinking for more than four years as a result of the country’s austerity-fuelled recession.

The index marked the first back-to-back falls since early 2012.

“The headline PMI fell only fractionally on the month, but a faster decrease in new orders paints a more negative picture,» Markit economist Phil Smith said.

The index has held below 50 since September 2009, just before Greece’s fiscal problems came to light, plunging its economy deep into recession and leading Athens to seek an international bailout.

A faster decline in the level of new orders, partly due to a more marked decrease in export business, dragged the headline index lower at the start of the fourth quarter, Markit said.

A third of surveyed businesses noted a drop in incoming new work and some were unable to make payments for new orders.

The survey showed output levels at factories fell for the 49th straight month. The rate of job losses in the Greek manufacturing sector picked up again after having slowed to its weakest for 44 months in September. About 18 percent of firms shedding staff in October.

Austerity measures imposed by the government in return for international financial help have kept Greece’s economy in recession for the sixth straight year in 2013, driving unemployment to a record high of nearly 28 percent.

Athens and its international lenders – its euro zone partners and the International Monetary Fund – expect the economic slump to bottom out this year, forecasting an anaemic recovery of 0.6 percent in 2014.


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