Greek factory activity contracts in July but hiring grows faster
Greek manufacturing activity shrank in July after a slight expansion the previous month, as a sharp drop in new orders led to reduced production, a survey showed on Monday, although firms hired new staff at a faster rate.
Markit’s Purchasing Managers’ Index for manufacturing, which represents about 10 percent of the Greek economy, fell to 48.7 points in July from 50.4 in June. Readings below 50 denote contractions in activity.
Reflecting weak demand, total order intake fell for the 23rd straight month and at the sharpest rate since last September. But export demand grew, particularly from France, neighbouring Bulgaria and Lebanon.
Despite reduced production levels, manufacturers continued to expand their payrolls for the fifth time this year.
“The sharpest rise in employee numbers for nine years was the sole bright spot in an otherwise disappointing month for Greek goods producers in July,” said Markit economist Samuel Agass.
Firms faced higher input costs in July, particularly for steel, but the rate of inflation eased to the softest in four months. Factory gate prices declined after stabilising in June, the survey showed.
“With unfinished business still declining and stock levels being reduced further, the likelihood of growth occurring in the second half of 2016 seems slim,” Agass said.
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