Greek Manufacturing Gauge Expands for 1st Time Since 2009Marcus Bensasson and Nikos Chrysoloras
Greek manufacturing expanded in January for the first time in 53 months, adding to signs that the country may be emerging from a six-year recession.
Greece’s Purchasing Managers’ Index rose to 51.2 last month from 49.6 in December, London-based Markit Economics said in a statement today. It was the first time since August 2009 that the index rose above 50, the mark that distinguishes expansion from contraction.
“We can say with a bit more confidence that the recessionary momentum is slowing,” Nicholas Magginas, an economist at National Bank of Greece SA in Athens, said by phone. “Even though manufacturing is only about 10 percent of domestic value added, it nevertheless shows an underlying trend for the rest of the economy and this could be in line with a stabilization of industrial production in the coming months.”
Today’s data followed a report from the Hellenic Statistical Authority last week that showed retail sales were unchanged from a year earlier in November, the first time since June 2010 they didn’t drop. Greece’s government predicts the economy will grow 0.6 percent this year after shrinking 4 percent in 2013, its sixth year of contraction.
Greek 10-year government bonds rose today, with the yield dropping 20 basis points to 8.41 percent at 1:44 p.m. in Athens. The country’s benchmark Athens Stock Exchange index rose 2.7 percent to 1,208.56, compared with a 0.2 percent drop in the Stoxx Europe 600 index.
An index of short-term trends in Greek economic sentiment rose to 92.6 in January from 91.4 the previous month, its highest level since September, according to a separate report today from the Athens-based Foundation for Economic & Industrial Research. In the industrial sector, confidence rose to 84.7 from 83.4, according to the report.
“There are some positive signs of stabilization in the retail sector, construction and the job market,” said Dimitris Katsikas, head of the Crisis Observatory, an Athens-based research organization. “Nonetheless, it is still too early to pronounce ‘economic recovery’ for Greece, as this positive trend of basic indicators first needs to be sustained and then augmented.”