Listen to this article
Still no light at the end of the tunnel for Greek factories.
A closely-watched business survey of Greek manufacturers pointed to the sixth straight month of contraction in February, amid a worsening in business conditions and concerns over the fate of its bailout programme.
Markit’s purchasing manager’s index for the sector hit 47.7 in February, a slight improvement from January’s 46.6 – but below the 50 mark that indicates contraction.
Greek factories reported falls in new business, staffing levels and purchases last month, with problems compounded by rising price inflation that pressurised margins.
The deterioration in economic conditions comes as creditors in the EU and International Monetary Fund remain at loggerheads over Athens €86bn bailout programme. Bailout monitors are back in the country this week in preparation for a review that could unlock around €6bn in much-needed rescue cash for the government.
But stalled creditor negotiations are taking their toll on the economy, which unexpectedly contracted at the end of 2016 at a quarterly rate of minus 0.4 per cent.
“The underlying causes behind the latest downturn follow an all too familiar narrative, as waning domestic and foreign demand continued to weigh on output, leading to further job losses”, said Alex Gill at Markit.