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Greek factory activity contracts again in February: PMI
[ATHENS] Greek factory activity continued to contract in February, a monthly survey showed on Monday, with a slightly firmer headline figure masking the sharpest decline in the output component since October 2013.
Markit's purchasing managers' index for manufacturing, which makes up about 10 percent of the Greek economy, stood at 48.4 in February compared to 48.3 in January. It was the eighth month out of the last nine that the reading has been below the 50 mark denoting growth. "The headline manufacturing PMI remained in contraction territory in February in a further sign that Greece's economy continues to struggle under the weight of uncertainty," said Markit economist Phil Smith.
Greece's new government, elected in January, secured a four-month extension to the country's bailout this week, during which time it must agree reforms in return for more aid.
Factories said clients at home and abroad were hesitant to commit to new orders, leading new business inflows to fall at an accelerated rate, according to Mr Smith. "This in turn placed greater downward pressure on producer prices, which fell to the greatest extent for six months, adding to the squeeze on profitability," he said.
Mr Smith added that it was surprising to see manufacturers report a modest net rise in employment at Greek factories, taking the rate of job creation in the sector to its highest since October 2007, before the world economic crisis.
Factory output declined for the second month in a row, falling at its fastest rate in 16 months, as new orders tumbled at their sharpest rate since July 2013 - their sixth consecutive monthly fall.
Backlogs of work also fell sharply again in February. The rate of decline was slightly slower than in the previous month but still the second-fastest seen since July 2013.