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Industry, materials and public services
Reuters staff
ATHENS, Nov 2 (Reuters) – Greek manufacturing activity fell in October, with a further decline in orders as the resurgence of COVID-19 reduced demand, a survey showed on Monday.
The IHS Markit Purchasing Managers Index (PMI) for industry, which accounts for about 10% of the Greek economy, fell to 48.7 in October from 50.0 in September.
“The impacts of the current COVID-19 pandemic once again weighed on customer demand in October, dragging the manufacturing sector back into contraction,” said IHS Markit economist Sian Jones.
Respondents noted that the decline in new orders in the important food and beverage sector held back overall production, Jones added.
October data signaled a further contraction in production across the entire Greek manufacturing sector. Anecdotal evidence suggested that a resurgence of virus cases had slowed demand and reduced the inflow of new orders.
The decline was modest overall and the fastest since May, IHS Markit said.
In line with the drop in total sales, new export orders fell for the eighth consecutive month in October. Manufacturers noted that the drop was due to weak demand from key export partners, especially those in Europe, where COVID-19 cases are on the rise again.
Input costs rose for the fourth month in a row, often linked to higher raw material costs following supply shortages, while producer prices fell for the eighth month in a row.
The reduction in producer prices, IHS Markit said, was reportedly due to increased competitive pressures as companies sought to boost sales by offering discounts. Although softer than that seen in September, the rate of decline was solid overall.
There was a fractional drop in employment after two months of expansion in August and September, often linked to lower production requirements and voluntary layoffs.
Nonetheless, Jones said manufacturers were optimistic about the production outlook for the next year.
Although the positive expectations were largely driven by hopes of ending the pandemic, our most recent forecast for annual industrial production calls for a modest 2.1% increase in 2021. As the sector is expected to contract a 4.6% throughout 2020, the pandemic levels may be prolonged. ”(Reporting by Michele Kambas; Editing by Toby Chopra)
