Optimism over Greek economy

GREEK manufacturing activity kept expanding last month as new orders grew at the fastest pace in over nine years, leading firms to increase hiring and production, a survey showed yesterday.

Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about 10% of the economy, rose to 53.1 from 52.2 in November. It was the seventh straight month of improvement and the sharpest pace of growth since June 2008. Readings above 50 denote expansions in activity.

Rising demand both at home and from abroad drove the sector’s continued expansion.

“The Greek manufacturing sector closed out 2017 on a firmly positive footing. Strong expansions in new orders, on both a domestic and foreign basis continued to drive the upturn,” said IHS Markit economist Alex Gill.

“The data buoy hopes the Greek economy has finally turned a corner and is on a path to recovery. Indeed, with business confidence hitting a record high, output looks set to increase and support growth, at least in the short term,” he said.

Manufacturers added workers last month for the eighth consecutive month, which helped them reduce their backlogs of unfinished work. Firms also bought more for the sixth time in as many months and at the sharpest rate in over 10 years. Greece’s jobless rate soared after the country succumbed to a debt crisis from 2009, leading to a prolonged recession and multiple state bailouts. At 21.1% in the second quarter, the rate remains the highest in the euro zone.

The government expects unemployment to fall to 18.4% this year and is targeting 2.5% economic growth.

Robust demand failed to boost manufacturers’ average selling prices, however, although the pace of input price inflation remained broadly unchanged, suggesting a squeeze on their margins.

Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence. — Reuters