Published February 01, 2013
ATHENS – Greek manufacturing remained in the grip of a deep slump for the 41st month running in January, with firms forced to shed yet more jobs as new orders fell at the steepest pace in 11 months, a survey showed on Friday.
Markit's purchasing managers' index (PMI) for Greek manufacturing, which accounts for roughly 15 percent of the economy, ticked up to 41.7 points in January from 41.4 in December.
The index has held below the 50 point mark dividing growth from contraction ever since September 2009, just before the country's fiscal problems came to light, triggering a regionwide debt crisis and plunging its economy into deep recession.
The fall in new orders in January came close to being the fastest in the survey's history, dating back to 1999. But the decline in export orders slowed, showing that weak domestic demand was the main drag on the sector.
Last year, Athens adopted a new round of austerity measures to qualify for its next batch of EU/IMF bailout payments, which is expected to keep the economy in recession for the sixth straight year in 2013.
The government projects gross domestic product (GDP) will shrink by 4.5 percent this year, compared with a 6.5 percent contraction in 2012.
"A new year failed to bring any evidence that Greece's manufacturing sector might be heading for a recovery. January data suggested the downturn may worsen before it eases," said Markit senior economist Phil Smith.
"The continued discounting of factory gate prices was made a little less painful by a drop in input price inflation. However, much of this slowdown was owed to a stronger euro during the month," he said.
On a brighter note, the rate of job shedding eased from December to the second-slowest pace in 19 months although it will continue to weigh on the country's record-high unemployment rate of nearly 27 percent.
Input price inflation slowed to a six-month low in January. Still, of the firms taking part in the survey, twice as many reported a rise in their average purchasing costs compared to those that saw a decrease.
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(Reporting by George Georgiopoulos; Editing by Hugh Lawson)