Greek manufacturing activity slowed further in June as rising inflation hit customer spending, prompting a decline in production and new orders, a survey showed on Friday.

S&P Global's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about 10% of the Greek economy, fell to 51.1 in June from 53.8 in May, the lowest reading in the expansion cycle that began in February 2021.

Still, the index remained above the 50 level that marks an expansion in activity.

"The impact of inflation on customer spending was felt more keenly by Greek manufacturers during June, as output and new orders fell for the first time since March 2021," said S&P Global economist Sian Jones.

Domestic and foreign client demand contracted amid reports of customers pausing or cancelling orders, she added.

Lower new order volumes led to a marginal fall in production in June. Foreign client demand also declined with new export orders contracting for the second time in the last four months and at the sharpest pace since January 2021.

According to manufacturers, higher selling prices and uncertainty over the war in Ukraine weighed on demand conditions.

On the inflation front, input costs continued to rise at a marked pace after more upticks in material, fuel and energy prices, although the pace of cost increases was the slowest since August 2021.

Greek firms tried to pass-through higher costs to clients with the pace of charge inflation well above the series average, but the slowest since September 2021, the survey showed.

In line with lower new orders and reduced pressure on capacity, the rate of job creation eased to the slowest since March 2021.

"Confidence at manufacturers dipped notably from May as concerns regarding the further impact of price rises on demand conditions dampened sentiment," Jones said. (Reporting by George Georgiopoulos; Editing by Susan Fenton)