June Greek factory activity slows, new orders fall – PMI

Greek manufacturing activity slowed further in June as rising inflation hit customer spending, causing a drop in output and new orders, according to a survey released on Friday.

S&P Global’s Purchasing Managers’ Index (PMI) for the manufacturing sector, which accounts for around 10% of Greece’s economy, fell to 51.1 in June from 53.8 in May, the lowest reading of the expansion cycle that began in February 2021.

Nevertheless, the index remained above the 50 level which marks an expansion of activity.

“The impact of inflation on customer spending was felt most harshly by Greek manufacturers in June as production and new orders fell for the first time since March 2021,” said Sian Jones, an economist at S&P Global.

Demand from domestic and overseas customers contracted amid reports of customers suspending or canceling orders, she added.

Lower new order volumes led to a marginal decline in production in June. Demand from overseas customers also fell, with new export orders contracting for the second time in the past four months and at the fastest rate since January 2021.

According to manufacturers, higher selling prices and uncertainty surrounding the war in Ukraine weighed on demand conditions.

On the inflation front, input costs continued to rise at a healthy pace after further increases in material, fuel and energy prices, although the pace of cost increases was the most slow since August 2021.

Greek companies have tried to pass on rising costs to customers with a pace of fee inflation well above the series average, but the slowest since September 2021, the survey found.

In line with lower new orders and less pressure on capacity, the rate of job creation has slowed to the lowest since March 2021.

“Confidence in manufacturers fell significantly from May as concerns about the further impact of price increases on demand conditions dampened sentiment,” Jones said. (Reporting by George Georgiopoulos; Editing by Susan Fenton)

Reuters

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