ATHENS, July 2 (Reuters) – Greek factory activity stayed on a recovery path in June, with solid increases in new orders and production prompting companies to add workers, a survey showed on Monday.
Markit’s Purchasing Managers’ Index for manufacturing, which accounts for about 10 percent of the Greek economy, dropped to 53.5 from 54.2 in May. Readings above 50 denote an expansion in activity.
“While rates of growth have eased across much of the euro zone in recent months, the Greek manufacturing sector showed itself able to sustain a solid expansion pace across the second quarter,” said Andrew Harker, IHS Markit associate director.
Driving the expansion in output, which rose for the 13th straight month, were increased new orders at home and from abroad. Export business has risen for nine consecutive months and its rate of growth was the strongest since January.
“Particularly pleasing in June was a sharp and accelerated rise in new export orders,” Harker said. “A potential headwind for Greek firms is rising cost burdens – input price inflation hit a 17-month high in June amid higher raw materials costs.”
Steel was widely mentioned by respondents among the raw materials price increases, the survey showed.
Manufacturers were able to pass the higher input costs on to customers to some extent but with pricing power still muted, producers faced further pressure on profit margins.
Employment in the sector continued to increase at a solid pace in June, extending the sequence of job creation to 14 months.
Greece’s jobless rate, 20.1 percent in March, is the highest in the euro zone. A debt crisis in late 2009 led to a long recession and multiple bailouts. Athens plans to exit its third rescue programme in August. – Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence. To subscribe to the full data, click on the link below: https://www.ihsmarkit.com/about/contact-us.html For further information, please phone IHS Markit on +800 6275 4800 or email economics@ihsmarkit.com (Reporting by George Georgiopoulos; editing by John Stonestreet)