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Manufacturing downturn loses momentum in Greece during December

Staff Writer | January 3, 2017
Greece’s manufacturing downturn eased in December, as firms registered weaker declines in both output and new orders.
Greece manufacturing
Greek economy   Markit Greece Manufacturing PMI
Job shedding, although only slight, was also evident for the first time since May. Meanwhile, manufacturers worked through their outstanding business while also maintaining stock reducing policies.

On the price front, businesses raised selling prices at the sharpest pace since September 2008 in the face of a substantial increase in input costs.

The seasonally adjusted Markit Greece Manufacturing Purchasing Managers’ Index (PMI) posted below the all-important 50.0 no-change mark for the fourth successive month in December, thereby signalling a further decline of Greece’s goods producing sector.

At 49.3, up from 48.3 in November, the latest figure rose to a four monthhigh and was broadly in-line with the historical trend (49.4). Part of the increase in the headline PMI was due to a weaker contraction in Greek manufacturing output. Nevertheless, the latest decline was the fourth in succession.

The lower volume of production was reflected in a further solid drop in post-production inventories. Goods producers registered a further decline in their new order intakes in December, with panel members citing weaker demand and the instability of the Greek financial sector.

That said, the fall was the weakest since September. Manufacturers also registered a reduction in new business from foreign clients. Latest survey data signalled a further drop in levels of incomplete work in Greece’s goods producing sector.

In fact, backlogs of work have lowered in every month since July 2008. Faced with fewer workloads, firms lowered their headcounts for the first time in seven months. However, the rate of job shedding was only slight and weak in the context of historical data.

Manufacturers recorded a substantial increase in their average cost burdens in December, with firms primarily linking the rise to higher prices for steel, zinc and dairy products. Moreover, the rate of inflation outstripped the long-run series average.

Consequently, firms increased their output prices for the first time in 70 months. Although average charges rose at a slight pace, it was still the sharpest reported since September 2008.