ATHENS (Reuters) – Greek manufacturing activity contracted at the slowest pace in more than three years in August, a survey showed on Monday, fuelling hopes that its long economic slump may finally be bottoming out.
Markit’s purchasing managers’ index for manufacturing, which accounts for roughly 15 percent of Greece’s economy, rose to 48.7 from 47.0 in July, its highest reading in 44 months.
The index has held below the 50-point line dividing growth from contraction since September 2009, just before Greece’s fiscal problems came to light, plunging its economy deep into recession and leading Athens to seek an international bailout.
“August saw the headline PMI edge closer to the all-important 50.0 threshold, a level it has not exceeded in four years,” said Markit economist Phil Smith.
“The index has now risen in seven of the past eight survey periods, highlighting a sustained slowdown from the rapid pace of contraction seen at the start of the year to near stabilisation,” he said.
Actual manufacturing output figures are also pointing towards a possible change in the trend. The latest available reading for June showed a 4.2 percent annual increase, its fastest growth in five years.
Among the encouraging signs in Markit’s August survey were a slight upturn in export sales and a stable overall order flow, which could help halt the decline in production. The positive reading in export orders ended a 23-month sequence of decline.
While output fell in August, the pace of decline was modest, easing to its slowest in more than three and a half years, although employment remained weak with firms continuing to shed jobs.
Fiscal austerity has kept Greece’s economy in recession for a sixth straight year in 2013, with unemployment at a record high of nearly 28 percent.
Athens and its international lenders expect the economy to bottom out later this year, and they forecast an anaemic recovery of 0.6 percent in 2014.
(Reporting by George Georgiopoulos; Editing by Hugh Lawson)