Greek factory activity shrinks in May, exports orders decline
Greek manufacturing activity shrank for the ninth straight month in May, with declining export orders and production leading firms to cut jobs, a survey showed on Tuesday.
Markit’s purchasing managers’ index for manufacturing, a sector that makes up about 10 percent of the economy, rose to 48 last month from April’s 22-month low of 46.5 but stayed below the 50 mark that denotes growth.
“The manufacturing PMI continues to point to a downturn in the Greek economy. May’s was the ninth successive sub-50 reading, albeit the rate of decline was slower than in April,” said Markit economist Phil Smith.
With Greece yet to conclude negotiations with its eurozone partners and the International Monetary Fund on reforms needed to unlock remaining bailout aid, fears of a “Grexit” from the eurozone have been revived.
Greece’s economy dipped back into contraction after a fragile recovery last year, shrinking by 0.2 percent in the first quarter.
Factory output was scaled back for the fifth consecutive month. New orders fell again while those from abroad declined at a sharp pace, marking the longest downturn since mid-2013.
“The weaker euro is driving up costs but businesses aren’t seeing the benefit of an increase in competitiveness, with the uncertainty that hangs over the country stifling demand,” Smith said.
The weak euro helped push firms’ input costs to a four-year high, while output prices fell as manufacturers tried to attract demand, a trend that has been intact since March 2011.
[Reuters]
