Processing in Greece at a low of 11 months

S&P Global’s PMI® survey data for March indicated a steady improvement in operating conditions across the Greek manufacturing sector.

However, overall growth was slower in the last 11 months, as production growth and new orders declined due to weaker demand conditions.

The main indicator was supported in part by the deterioration of supply delivery time (which is usually an indication of improved manufacturing health).

At the same time, cost pressures increased further as input prices increased significantly. In response, companies have increased output charges at the fastest rate in the last 19.5 years or so.

Rising costs and greater uncertainty over the war in Ukraine have had a negative impact on production expectations, as confidence has fallen to its lowest level since November 2020.

S & P Global’s seasonally adjusted Purchasing Managers’ Index® (PMI®) closed at 54.6 in March, down from 57.8 in February, indicating a steady but slower improvement in health. Greek manufacturing sector.

Overall growth fell to its slowest since April 2021. Production continued to rise in March, albeit at the slowest pace in the current 12-month period of continuous growth.

The moderate increase in production was linked to the further influx of new orders. Nevertheless, customer demand was sluggish due to higher selling prices and growing uncertainty about the war in Ukraine.

Demand from overseas customers weakened in March as new export orders fell for the first time in a year.

Overall sales increased slightly, and at the slowest pace in the current 12-month period of continuous growth, as growth was adversely affected by declining customer purchasing power.

In terms of prices, Greek manufacturers recorded a significant increase in costs at the end of the first quarter. Higher input prices are due, as noted, to a wide increase in material costs, along with higher energy and fuel charges.

According to reports, the increases of the last two were aggravated by the Russia-Ukraine war, leading to an increase in total costs almost to a record level.

In an effort to pass on the highest costs to customers, the selling prices of Greek producers of goods increased in March, at the strongest rate recorded in the history of the survey (since November 2002).

Meanwhile, business confidence fell to a 16-month low in March. Although stronger than average in the history of research, the degree of optimism was reportedly negatively affected by severe material delays, rising cost pressures and greater uncertainty.

Weaker output expectations were also evident in the milder increase in employment levels at the end of the first quarter. The pace of job creation was the slowest in six months as demand pressures eased.

The increase in employment is due in part to efforts to reduce work in progress. However, the levels of outstanding work increased at a faster rate, as delays in raw materials created production problems.

The extension of supply delivery times worsened again in March, as the delays were the longest recorded in five months.

Serious shortages and logistical challenges in transport have led to a deterioration in supplier performance.

In proportion to the milder increase in new orders and the longer delivery times of inputs, companies recorded a slowdown in their buying activity.

The growth of input markets was the weakest in the last year, as supply stocks declined due to difficulties in replenishing stocks. Respectively, stocks of finished products decreased significantly.

Commenting on the results of the latest survey, Siân Jones, an economist at S&P Global, said:

“Greek manufacturers indicated a slowdown in growth at the end of the first quarter, as production and new orders increased at a slower pace.

The weaker demand from customers is due to soaring prices and increased uncertainty due to the war in Ukraine.

As a result, market growth and employment have weakened, while the modest increase in unfinished business is due to material shortages.

The Russia-Ukraine war has further eroded supply chains as supply times have been extended to the highest level since last October.

Material shortages and delays caused a new acceleration of cost inflation. Nevertheless, the increase in selling prices was the one that set a record in the history of research.

The war in Ukraine, higher costs and declining disposable incomes have pushed confidence to a 16-month low.

Our forecasts have also been revised downwards, with industrial production now expected to increase by 2.3% in 2022. ”