Production growth in the Greek manufacturing sector remained at high levels in May, although the supply chain disruptions have weighed on the upside and pushed up input costs, according to the latest PMI® survey data from S&P Global.

Growth in output and new orders were strong across the board, although they eased to a four-month low as strong demand from customers remained. Meanwhile, production expectations they touched the strongest levels of the last three months, while companies continued to hire new staff.

However, supply chain disruptions worsened as companies scrambled to stockpile and increase purchases, in order to reduce the consequences of delays of deliveries of inputs to production. Still, the rate of cost growth soared to the fastest on record in about a year and a half. Although historically high, the growth rate of output charges slowed compared to April.

Lower, at 54.9 units, the index in May

The seasonally adjusted Purchasing Managers’ Index of S&P Global for the manufacturing sector in Greece (Purchasing Managers’
Index™ – PMI) closed at 54.9 points in May, lower from 55.2 units in April, indicating further improvement in the health of the Greek manufacturing sector. The pace of growth remained historically high, although it eased to the slowest on record in four months.

Output levels of Greek goods producers rose at a strong, albeit weaker, pace in May. Panelists noted that continued demand growth and a further rise in new orders supported the upside.

However, some companies reported that problems in production capacity hindered growth. The new monthly increase in new sales made by Greek manufacturers in May contributed to the overall recovery.

The pace of growth was little changed from April and was broadly strong, albeit the slowest since January.

At the same time, the growth rate of new export orders also declined. However, the rate of increase was significant and faster than the survey’s long-term average. The companies said demand from customers in key European markets fueled growth.

Inflation at 2.8% in 2024

Siân Jones, Chief Economist at S&P Global Market Intelligence, commented:

“Greek manufacturers continued to indicate strong performance across the sector during May, as output and new orders increased further sharply. Meanwhile, business confidence improved and goods producers hired additional staff at one of the fastest rates in more than two years.

However, disruptions in the supply chain hampered production, as ongoing problems on routes through the Red Sea pushed input costs higher and began to put some pressure on production capacity. In fact,
supply lead times lengthened to a greater extent compared to April, as the cost burden skyrocketed – mainly due to higher prices on some food items – and rose at the steepest rate on record since December 2022.

Sales price growth remained at historically high levels, however the rate of growth eased slightly during the month. After cutting rates in mid-2023, the rate of charge growth has exceeded the survey average for nine straight months, indicating that inflation may remain high in the coming months. According to our latest forecasts, the Consumer Price Index (CPI) will increase by 2.8% in 2024.”