S&P Global: The Greek manufacturing PMI index slipped in May to the lowest level in more than a year

A steady, albeit slower, improvement in operational conditions across the breadth of the Greek manufacturing sector was indicated by the May S&P Global PMI survey.

More specifically, the seasonally adjusted S&P Global PMI for the manufacturing sector, in Greece, closed at 53.8 points in May, down from 54.8 points, in April. According to the survey, the latest value of the headline index indicated a steady improvement in the health of the Greek manufacturing sector, but overall growth weakened to the slowest pace recorded since March 2021.

Slowdown

The unchanged inflows of new orders in May contributed to growth slowdown. The corresponding seasonally adjusted index fell to the lowest level recorded in more than a year. Any kind of increase was linked to new orders from customers abroad. However, growth slowed down due to significant increases in selling prices which reduced customer demand.

Exports

New export orders continued to increase, although sales abroad increased only marginally. Some companies reported that uncertainty due to the war in Ukraine also weighed on export performance. As a result, output growth slowed to the weakest level recorded in the current 14-month period of continuous growth. Greek manufacturers recorded modest production growth as delays in material deliveries hampered production capacity. At the same time, inflationary pressures remained significant as selling prices rose at a stronger pace. Companies in the Greek manufacturing sector recorded one of the fastest increases in charges in the history of the survey, due to significant increases in input prices, which were largely passed on to customers.

Cost increase

The rate of cost growth was historically high, but fell to the weakest level recorded since last August. Nevertheless, goods producers continued to report rising costs of fuel, energy and materials, while stressing the price increases of metals and plastics.

In line with the significant price hiles and weak demand from customers, companies reduced input purchases in May. Purchasing activity declined for the first time since February 2021, albeit only marginally. Many companies opted to use existing input inventories as purchasing inventories shrank at the second fastest pace on record in more than a year. Efforts to increase finished products inventories were also hampered as they decreased at the second fastest rate since April 2020.

Employees

Meanwhile, Greek manufacturers further increased their number of employees in May. Higher capacity led to the first contraction in backlogs since April 2021, although the pace of job creation eased to the slowest on record in more than a year. Output expectations for the year ahead improved in May to the highest level in three months. Unconfirmed data, according to the survey, suggested that optimism was driven by hopes for price stabilization, investment in new products and greater demand from customers.