ECONOMY

Manufacturing slips again, at slower pace

Greece’s manufacturing sector contracted at a slower pace in December, hit by adverse weather and a drop in new orders, a monthly survey of around 300 companies showed yesterday. The Greek Purchasing Managers’ Index (PMI) rose to 49.9 in December from 48.6 in November, but stayed below the 50.0 mark that divides growth from contraction. «Operating conditions in the Greek manufacturing sector deteriorated for the second month running during December,» said NTC Research, which compiled the survey. «The PMI was negatively affected by three out of its five constituents during December. Only a further month of lengthening of suppliers’ delivery times as well as growth of production served to boost the PMI,» it added. Delivery times typically lengthen when demand rises. NTC said a number of companies cited adverse weather as the main reason for a decline in new orders, which fell for the second month in a row. Fewer orders also contributed to a drop in staffing levels, the seventh consecutive month of contraction, albeit at a slower pace. Firms also reported a fifth consecutive month of output price inflation although the rate of price hikes was marginal. Greece’s service-dominated economy is expected to grow by 4.2 percent this year, buoyed by large investments in infrastructure upgrades related to the Athens 2004 Olympic Games. In the whole of the euro area, the Reuters Purchasing Managers’ Index rose to 52.4 from 52.2 in November, its highest level since January 2001. The eurozone output index edged up in December to 54.5, the highest level since January 2001, from 54.4 in November. But the employment index remained at 48.5 in December and has now failed to rise for 31 months in a row. «Job cuts were often associated with the need to improve competitiveness at home and abroad in the face of an uncompetitive exchange rate,» said NTC Research. The US manufacturing index, compiled by the Institute for Supply Management, surged to 66.2 in December from 62.8 in November, its highest since December 1983. New orders were the highest in 53 years. (Reuters)