Austerity measures begun three years ago are slowly shrinking the manufacturing sector, according to a survey by Markit Economics, a trend that picked up in March when production capabilities fell faster than the previous month as a result of the subsectors of intermediate and capital goods corresponding decline.
New orders received by goods producers declined at a sharp and accelerated rate in March, due mainly to a general fall in demand from both the domestic market and the export market.
During March, the domestic and export markets’ demand for the products of Greek manufacturing decreased significantly. Less production meant unemployment for many workers in the firms, while Greece’s official unemployment rate is at 26 percent.
Anticipation of Cyprus’ coming austerity measures also had an impact on the accelerated contraction of Greek manufacturing in March. The Greek economy’s recession is estimated to continue until 2019, due to fiscal austerity policies.