Manufacturing output rises, but orders fall
The manufacturing sector’s purchasing managers’ index (PMI) appears to have improved in Greece, but S&P Global that compiles it seems particularly concerned about the course of the sector, given the decline in new orders.
According to what S&P Global announced on Friday, the PMI index in Greece stood at 51.2 points in October, up from 50.3 points in September.
This rise is attributed to the increase in output recorded in October, after a slight contraction in the previous period. Interestingly, however, the increase in production is not so much thanks to greater demand, but mainly because of efforts to build contingency stock of finished products, which may be related to concern about a generalized conflict in the Middle East, as well as the possible effects on the global economy from the outcome of the US presidential election on Tuesday. It is no coincidence that inventories of finished goods rose for the first time since March 2023, and at the fastest pace since August 2020.
On the other hand, new orders fell for a second consecutive month, negatively affecting the growth rate of production. The decline in total new sales was driven by weak demand from domestic and overseas customers as new export orders fell for the first time since last November.
Also of concern is the fact that the prices of commodity imports increased again in October, mainly the price of energy, while shortages were also recorded, which led Greek manufacturing companies in turn to increase the prices of their products. However, the rate of increase in factory prices was the weakest on record in the last 14 months of continuous growth, as competition prevented large price increases.
Limited inflows of new orders and the use of inventories to supplement production led to a reduction in input purchases last month. Greek producers of goods recorded a marginal decrease in both purchasing activity and input stocks. Delays in shipments and transportation led to a further deterioration in supplier performance.
Despite subdued demand conditions, Greek manufacturing firms’ production expectations rose in October. The level of optimism was the highest since May, driven by planned investment in machinery and advertising, alongside new product development.
