Greece: Business expectations increase in February after a 5-month decline

Greece: Business expectations increase in February after a 5-month decline

In February, the Business Expectations Index in Industry stepped up, after a five-month decline, to 104.1 (from 97.6) points. The conclusion is based on the Foundation for Economic and Industrial Research’s survey, which notes that the announcements due to the electoral period tend to improve expectations, a trend that is systematically recorded.

Forecasts for a further recovery of the domestic economy, coupled with an increase in exports as a whole, create favorable conditions for the domestic sector’s growth. The escalation of private investment, the implementation of privatizations-concessions, the financing of investment in manufacturing at regional level, and the strengthening of building activity reinforce the prospects of the domestic industry.

Exports

Exports still strongly support domestic manufacturing. Specifically, exports of industrial products in 2018 exceeded € 13.7 billion, marking an increase of 13% compared to 2017. Similarly, total exports (15.8%) moved upwards, the value of which was formed to € 33 billion. On the other hand, the rise in imports of industrial products in relation to industrial exports in the year 2018 (3.1%) is milder, with the trade deficit in industrial products being reduced by € 672 million, to € 16,190 million, or -3.9%. By contrast, over the examined period, the deficit trade balance in the total of the exported products has increased by 0.6% compared to 2017 (from € 20,6170 million to € 20,734 million).

Forecasts

In the forecasts for the evolution of production in the next 3-4 months, the relative balance gained 17 points and stood at 27, with 36% (from 28%) of the enterprises forecasting a rise in production in the next quarter and 9% (from 18%) a decrease.

The Employment Prospects Index is growing in February at +13 (from +5) points, with the proportion of businesses predicting an increase in employment in the next quarter to stand at 22% (from +18%), while 8% (from 13%) is expecting a decline.

The positive forecasts for sales in the coming months are boosted considerably in February (+29 points in the balance from +10), with 36% (from 26%) of companies expecting a rise in the coming period and 7% (from 16 %) a decrease. By contrast, the estimate of current sales declined to +3 (from +8) points, with 24% (from 26%) of respondents estimating their upward trend./ibna