Industry indicates recession

Greek industry is in free fall, data related to turnover and new orders have shown, vindicating forecasts that the economy is very close to, if not already in, recession. National Statistical Service (NSS) data showed yesterday that the country’s industrial turnover declined by 30.7 percent in May, while prospects for the coming months are exceptionally negative, as new orders in May posted a tremendous drop of 37.7 percent. The fall in turnover and more significantly in new orders will have a particularly negative impact on growth and the unemployment rate in the coming period. Unemployment soared to 9.4 percent in April 2009, compared to 7.7 percent in the same month in 2008. Almost one in every three jobs created in the March-May period was part-time work, while about 5,900 jobs were reduced from full-time to part-time as companies try to offset the drop in sales with a reduction of staff outlays. Virtually all industry sectors took a battering in May, according to the NSS. From basic metals (down 54.2 percent) to electronics (37.3 percent) and from machinery (32.2 percent) to chemicals (29.6 percent) and apparel (28 percent), the drop was across the board. Only the pharmaceutical sector posted some growth (up 1.7 percent). The drop in turnover by 30.7 percent may well have been affected by the decline in international fuel prices but this is not the only reason behind the drop, as all sectors are showing signs of the crisis. Manufacturing saw turnover shrink by 30.9 percent, mostly due to the fall in in demand for textiles (down 28.8 percent), oil and coal products (50.5 percent), basic metals (42.9 percent) and electrical equipment (39.6 percent). The turnover of products on the domestic market fell by 26.5 percent, while that for exported products shrank by 40.7 percent. May has also been the 13th consecutive month of decline for industrial production, which fell by 7.2 percent. In total, it has contracted by 8.7 percent in the first five months of the year compared to 2008. This makes for a very tough current year, which seems to indicate recession, at least for the duration of 2009.