Output growth in Greece accelerates amid higher new orders
Staff Writer |
The Greek manufacturing sector’s recovery continued in May, with further increases in output, new orders and employment recorded.
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Moreover, rates of expansion in each of these areas quickened from April.
Meanwhile, inflationary pressures picked up as higher raw material costs were often passed on to customers by way of increased selling prices.
The seasonally adjusted IHS Markit Greece Manufacturing Purchasing Managers’ Index (PMI) – a composite indicator designed to measure the performance of the manufacturing economy – rose to 54.2 in May from 52.9 in April.
Business conditions have now improved on a monthly basis throughout the past year, with the strengthening in the health of the sector more marked than was seen in the previous month.
In line with the picture for the headline PMI, manufacturing output has now risen in 12 consecutive months.
The increase recorded in May was marked, with panellists reportedly raising production in line with higher new orders.
Growth of total new business increased at a faster pace in May, as did new export orders where growth hit a three-month high.
Anecdotal evidence suggested that new orders from domestic clients also contributed to the expansion in total new business.
Firms responded to higher output requirements by taking on extra staff in May.
Moreover, the rate of job creation was only just below March’s survey record.
This improvement in operating capacity enabled manufacturers to work through backlogs, despite marked new order growth.
Outstanding business decreased for the second month running.
As well as taking on additional staff, firms also supported growth of output by increasing their purchasing activity.
Furthermore, the rate of expansion quickened.
There was further evidence of pressure on supply chains amid rising demand for inputs.
Suppliers’ delivery times lengthened solidly, and to a greater extent than was seen in the previous month.
Inflationary pressures intensified in May, with both input costs and output prices rising at sharper rates than in April.
The increase in input prices was the fastest since January, with higher costs for raw materials such as oil and metals reported.
Meanwhile, the rate of output price inflation was the steepest since August 2008.
Stocks of purchases increased for the fifth consecutive month during May.
In contrast, stocks of finished goods decreased for the first time in three months.
Although easing from April’s record high, the level of optimism in the Greek manufacturing sector remained high.
More than 45% of respondents predicted a rise in output over the coming year, linked to expectations of improving economic conditions and higher new orders. ■