Domestic blues weigh on industries
An improvement in international trade is providing some support for Greece’s industrial output. However, lingering economic uncertainties on the domestic front are weighing on the crucial construction sector, data showed yesterday. Figures from the Hellenic Statistical Authority (ELSTAT) showed that industrial output fell 4.5 percent year-on-year in June with manufacturing production shrinking by 3.0 percent. «The rate of decline in industrial output seems to be stabilizing at levels of -4 to -5 percent as a result of an improved picture in sectors with an export orientation, such as chemicals, foods and base metals,» National Bank economist Nikos Magginas told Reuters. «Based on the leading indicators, the reading in the next months is expected to be the same, as margins for improvement via exports are limited by the significant weakening in domestic demand.» Meanwhile, in the building industry, construction activity, measured by the number of new building permits, dropped 12.4 percent year-on-year in May, showing no sign of recovery in the hard-hit sector. «We may have a bottoming out in the number of permits issued toward the end of the year and an upturn in residential housing after the second quarter of 2011,» said an economist, «on the condition that there is an improvement in credit expansion.» Construction, which accounts for about 7 percent of gross domestic product, dropped 14.2 percent last year, contributing to the country’s first recession since 1993. Statistics service data showed that the number of building permits fell 7.5 percent year-on-year in the first five months of 2010.
