The health of the Greek manufacturing sector continued to improve in May, according to the latest PMI survey data. The sharp increase in production and new orders supported general growth. As a result, the steady increase in customer demand contributed to the rise in employment levels, which was among the strongest in the history of the survey.
Meanwhile, the rise in input costs was slowed down at a steady pace, which was the slowest since July 2016. Companies responded by raising their factory prices at the weakest pace recorded over a three-month period.
Production forecasts remained strongly optimistic in May, as new customers and the largest volume of export orders increased confidence levels.
Seasonally adjusted Purchasing Managers’ Index (PMI®) – a composite index designed to measure the performance of the manufacturing economy – closed at 54.2 points in May, lower from the recent record high in April (56.6 points), however, suggesting a steady improvement in operating conditions in the Greek goods production sector. The recent price of the main PMI index expanded the current growth period to two years.
Although the growth rate of output weakened by recording a three-month low, it remained, in general, strong and markedly above the trend recorded in the history of the survey.
Unconfirmed data indicated that continued output growth was the result of higher demand from both domestic and overseas.
Development of new business
At the same time, manufacturing companies indicated strong growth in new business in May. Although the corresponding seasonally adjusted indicator closed slightly below the recent April high price, it remained higher than the long-term average recorded in the survey’s history. Panel members reported that the increase came from the bigger domestic and foreign demand, as new export orders rose sharply for the twentieth consecutive month.
Pricing pressures weakened in May, while the growth rate of input costs slowed down to the slower pace since July 2016. Nevertheless, panel members indicated that steady price increases were the result of higher raw material and transport costs. As a result, the greatest demand has allowed companies to pass higher input costs to their customers by increasing factory prices for the fourth consecutive month.
Meanwhile, employment levels rose further in May. The sharp rise in the workforce was generally attributed to higher production requirements, and the rate of growth remained among the fastest recorded in the history of the survey. Consequently, companies have shown reduced pressure on their workforce, as the volume of untapped work has fallen slightly.
Increase in orders
The sharp increase in new orders has led to a further contraction in supply stocks as inventories were used to meet production requirements. Additionally, buying activity increased sharply.
Finally, business confidence among manufacturers was particularly positive in May. High levels of optimism have been linked to the acquisition of new customers and the greatest demand from foreign customers./ibna