IHS Markit: Improving operating conditions in the Greek manufacturing sector in December

Significant improvement in operating conditions throughout the Greek manufacturing sector, due to sharper increases in production and employment levels, was indicated by the data of the December PMI survey.

IHS Markit Purchasing Managers’ Index (PMI) closed at 59 points in December, slightly higher than the 58.8 points in November, indicating a significant improvement in the health of the Greek manufacturing sector. . Overall growth was the strongest on record since August, due to a slower decline in supply stocks and a faster rise in production and employment levels.

The most intense increase in production throughout the Greek manufacturing sector contributed to the overall growth. Despite material shortages, the rise was sharp and the fastest in three months, due to the continued increase in demand from customers. Although the growth rate of new orders slowed down, at the end of 2021, to the weakest recorded in five months, it was generally steep and was supported by the stronger demand of domestic and foreign customers. However, some companies reported in the survey that many customers were reluctant to place orders due to significant increases in charges.

In proportion to the further increase in total sales to historically high levels, manufacturers increased their recruitment activities in December. The rate of job creation was the fastest recorded since February 2020, as companies also tried to process unfinished orders. Although the growth rate of backlogs has weakened from a record high in November, it was the second fastest since data collection began 19 years ago. According to the survey, the vast majority of companies linked the increase in pending operations to material shortages and delays in input deliveries.

Deteriorating supplier performance weakened slightly by the end of 2021, but continuing reports of material shortages and overcrowding in ports led to another significant increase in input prices, albeit at a slower pace since August. Companies continued to pass on the highest costs to customers where possible, as sales prices rose at a remarkable rate. However, efforts to build input stocks to avoid future material shortages have led to the fastest growth in purchasing activity since February 2000. Supply stocks continued to decline, albeit at a slower pace since 2020, than in March as the companies tried to replenish their stocks. However, stocks of finished products decreased significantly, as manufacturers found it difficult to replenish stocks sent to fulfill orders.

The optimism that came from the hopes for a weaker price increase and the continued demand from the customers in 2022 led the expectations of the producers of goods in relation to the production to the highest levels that have been recorded since June.