ECONOMY

Survey shows Greek manufacturing expanding, but eurozone stagnant

Greece’s manufacturing sector posted a higher pace of growth in February, boosted by robust output, new orders and exports, a monthly survey of around 300 companies showed yesterday. The Greek Purchasing Managers’ Index (PMI) rose to 52.5 in February from 50.3 in January, holding above the 50 line that divides growth from contraction. «Output among Greek manufacturers expanded for the third successive month in February and recorded a steeper rate of growth than the previous month,» the survey compilers, NTC Research, said. It said higher new orders were the key reason behind the sharp pace of expansion, fueled by improved business confidence, with new orders growth up for the second month in a row. Companies also reported robust growth in their export order books, at a stronger pace than in January. Staffing levels expanded in February, respondents said, after eight straight months of contraction, although the rate of job creation was only marginal. Price pressures remained, with input price inflation up for the eighth month in a row while stocks of purchases and finished goods contracted for the second month running, but at a slower rate than in January. The same survey showed that the strength of the euro is starting to curb recovery in the eurozone’s manufacturing industry, just as pressure is mounting again on the European Central Bank to cut interest rates this week. A parallel British survey also indicated the strength of the pound against the enfeebled dollar is holding factory activity back. The February surveys commissioned by Reuters, in which thousands of companies were asked how their businesses were placed, showed expansion was continuing in both the eurozone and Britain, but the hoped-for acceleration had not emerged. Economists said they could force the ECB to consider cutting rates, although not for some months, following recent anguished comments from leaders of major eurozone economies about problems in winning export orders. The Reuters Eurozone Purchasing Managers’ Index (PMI) recorded a headline figure of 52.5, unchanged from January. «It does indicate that the strength of the euro is having something of an effect on the manufacturing sector,» said James Knightley at ING Financial Markets in London. The eurozone survey showed slowing growth in new orders and increasing job cuts as manufacturers struggle to keep export prices competitive in the face of a euro which recently hit record highs against the dollar around $1.29. The British equivalent, the CIPS/Reuters purchasing managers’ index, fell to 53.2, its lowest level for five months, from a downwardly revised 55.8 in January. In the United States, factory activity dipped slightly in February but stayed at high levels, the Institute for Supply Management reported yesterday. The ISM index fell to 61.4, down from 63.6 in January. The decline was greater than expected. Despite that, however, the index stayed above the 60 level for the fourth month in a row. (Reuters)