ATHENS (Reuters) - Greek manufacturing activity contracted in April for the eighth month in a row as a marked decline in new business led to production cuts and job cuts, a survey showed on Tuesday.
Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about 10 percent of the economy, rose to 48.2 from 46.7 in March. Readings below 50 denote contractions in activity.
The rate of decline in new orders, including from abroad, eased from March, with firms citing weaker client demand.
“The latest data highlighted a further deterioration in the health of Greece’s manufacturing sector. Panelists frequently alluded to a fall in underlying demand as the driving force behind the contraction,” said IHS Markit economist Alex Gill.
Faced with lower production requirements, companies cut staff for the fifth consecutive month but at a softer pace compared to March.
Manufacturers continued to face increased input costs in April, driven by a weaker euro and higher raw material prices.
Although the rate of inflation eased from March, stagnant factory gate prices continued to squeeze profit margins.
On a more positive note, optimism on future growth prospects hit a 35-month high in April, Gill said, “perhaps buoyed by the release of above-target government budget statistics.”
Statistics in April showed Greece outperformed on the fiscal front last year, attaining a primary budget surplus, excluding debt-servicing costs, of 4.2 percent of GDP.
Reporting by George Georgiopoulos; Editing by Hugh Lawson