Greek factory activity expanded steadily in May although growth in output and new orders softened and cost inflation surged due to ongoing supply chain delays, a survey showed on Monday.

S&P Global's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about 10% of Greece's economy, dropped to 54.9 in May from 55.2 in April.

A reading above 50 marks growth in activity. Despite easing to the slowest pace in four months, growth remained historically elevated, as Greece has outperformed many other European economies.

Output and new orders growth also eased but was still solid.

However, worsening disruptions to supply routes through the Red Sea delayed delivery of goods and hampered sourcing of materials. This pushed input costs higher and started putting some pressure on production capacity.

Costs rose at the sharpest rate in almost a year and a half.

"The rate of increase in charges has outpaced the series average for nine consecutive months, suggesting inflation may remain sticky in the months to come," said Sian Jones, an economist at S&P Global Market Intelligence.

S&P forecast consumer price inflation in Greece for this year will be 2.8%.

To mitigate the impact of delivery delays on production, Greek manufacturers sought to build stocks and increase purchasing and hired more workers to boost capacity.

Amid hopes of stronger sales, new client wins and improved investment conditions, Greek companies were more upbeat in May about the output outlook for the coming year, the report said. (Reporting by Angeliki Koutantou; Editing by Susan Fenton)