S&P Global’s seasonally adjusted Purchasing Managers’ Index (PMI) for the manufacturing sector in Greece closed at 50.9 points in November, slightly lower than October’s 51.2 points, indicating a marginal improvement in the health of the Greek manufacturing sector. According to S&P Global, the pace of growth was the second-slowest in a year, but stronger than the long-term survey average.

The recovery in operating conditions was supported by a further increase in new orders in November. Greek manufacturers registered a marginal increase in new salesafter acquiring new customers and improving demand conditions.

The increase in total new orders was partly due to the return of new export business to recovery conditions. Stronger demand from new customers in overseas markets helped push the pace of growth to the strongest since July.

Nevertheless, production levels rose marginally in November. Companies said production capacity and inventories were sufficient to support the new, albeit marginal, rise in new orders. In addition, the rate of growth slowed compared to the corresponding one observed in October. After a modest increase in October, employment in Greek manufacturing companies returned to a contractionary environment in November. According to members surveyed by S&P Global, staffing levels fell after labor shortages and a reduction in temporary workers. Although marginal, the rate of job loss was the second-fastest on record since December 2020 (along with October 2023).

Lower workforce numbers were recorded due to a further reduction in the backlog in the middle of the fourth quarter. The rate of decline was unchanged from October and the second-fastest on record since January as companies successfully coped with output demands.

Meantime, the rate of increase in input prices accelerated in November, after cost pressures eased in recent months. Higher raw material prices and energy bills were cited several times by members surveyed as the cause of the recent increase. The rate of increase was the fastest on record in three months.

Respectively, outflow fees increased at a historically high ratewhich was the wettest on record since August. Despite relatively subdued demand conditions, companies were able to pass on higher costs to customers.

The higher costs weighed on goods producers as they adjusted their input purchases upwards on concerns about future increases in material prices and further delays in supplier delivery times. However, a lower-than-expected inflow of new orders led to a build-up in inventories. In fact, finished goods inventories rose at the fastest pace since October 2008.

Finally, business confidence improved in November. Optimism about the outlook for output next year rose to the highest level since May and was broadly significant.