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Greek Feb factory activity expands as new orders rebound -PMI

A Greek cotton yarn producer cuts output as energy crunch hits European knitting industry

ATHENS (Reuters) - Greek manufacturing activity expanded in February at the fastest pace since last May, helped by renewed growth in output and an overall rise in new orders and employment, a survey showed on Wednesday.

S&P Global's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about 10% of the Greek economy, rose to 51.7 in February from 49.2 in January.

Readings above 50 indicate growth in activity.

Production rose in February at the fastest rate in a year, thanks to rising demand and a rebound in new orders. Employment increased for the second time in the last three months.

"Greek manufacturers signalled positive developments across the sector during February, as output, new orders and employment all returned to growth territory," said S&P Global economist Sian Jones.

"Greater production was supported by stronger demand conditions, as firms highlighted lower uncertainty and hesitancy among clients. Buoyed by increased new orders, workforce numbers grew, and business confidence strengthened to the highest level in a year," Jones added.

In contrast, new export orders contracted further, with the decrease linked to pressure on the purchasing power of overseas customers due to higher energy costs and global economic uncertainty.

Work backlogs fell again but the rate of decline was the slowest in six months.

On the input price front, cost burdens faced by Greek manufacturers increased again in February, but at a much slower pace. The rate of input price inflation was the slowest since August 2020.

Business confidence rose to its highest level since February 2022, with expectations over the output outlook in the next 12 months and hopes of a further uptick in client demand boosting optimism.

(Reporting by Renee Maltezou and Lefteris Papadimas; Editing by Susan Fenton)