ECONOMY

Manufacturing sector expands

Growth in Greece’s manufacturing sector continued in August, with output rising to 14-month-high levels, a monthly survey of around 300 companies showed yesterday. The survey, conducted in Greece by NTC research, showed that the seasonally adjusted Purchasing Managers’ Index (PMI) rose to 53.2 from 53.0 in July. The 50-mark separates growth from contraction. At the same time, the eurozone PMI moved back to 50.4 in August from 50.8 in July, while a similar measurement in the US showed an even bigger slowdown, the Institute for Supply Management (ISM) reported yesterday, warning that growth is threatened by surging energy costs. The ISM manufacturing index fell to 53.6 percent from 56.6 percent in July, the organization of supply managers said in its report, seen as a reliable gauge of the US factory sector. The PMI gain was due to a number of different factors, NTC said in a report. On output and demand, it remarked that «the seasonally adjusted Output Index rose for the fourth consecutive month in August, inching up from July’s 56.5 to 56.8, its highest level since June 2004.» «The latest robust expansion of output extended the current period of growth to 21 months. Higher production levels were supported by increased intakes of new orders, but also by work on existing projects,» it added. Employment rose for the second consecutive month, as employers hired people to meet a rise in orders. August employment gains, while modest, were the biggest in 15 months. Concerning prices, «the seasonally adjusted Output Prices Index registered 50.2 in August, signaling a negligible rate of increase in charges by Greek manufacturing firms,» NTC reported. «Panelists reported that, despite steep input price inflation, they were generally unable to pass on higher costs to customers due to intense competition,» it added. «Overall it is a positive outlook, especially given the slight drop in eurozone manufacturing and high oil prices,» EFG Eurobank economist Platon Monokroussos told Reuters. «The data signal the improvement in the manufacturing sector. The increase in new orders is a good sign for future production. The increase in the employment component is also good for the labor market. The data show the economy is growing. But there are risks ahead, for example high oil prices,» he added. «It is a positive signal. It is an indication that the country’s growth prospects remain strong at the present level,» said Piraeus Bank’s Michael Lambrianos. A disappointing performance in Germany is to blame for the drop in the eurozone PMI, NTC reported. The 50.8 figure was lower than expected. Economists had forecast a rise to 51.0. The eurozone jobs outlook was slightly brighter as firms cut jobs at a slower pace and mirrored data from the European statistics office yesterday, which showed the eurozone jobless rate fell to 8.6 percent in July – its lowest level in two-and-a-half years. (Reuters, Kathimerini, AFP)