October 4, 2023
S&P Global Greece Manufacturing PMI®
Softer demand conditions seen by Greek manufacturers during September weighed on the sector’s overall performance, according to the latest PMI® data from S&P Global. New orders grew only fractionally on the month as customer demand dwindled. Subsequently, the pace of expansion in output waned and was the slowest in eight months. Challenges acquiring raw materials also dragged on the upturn, as damage caused by recent severe weather events hampered supply chains and drove stock depletion as firms struggled to replenish items. Meanwhile, lower backlogs of work and only a slight uptick in inflows of new orders led to the weakest rise in employment since February. At the same time, input costs continued to increase at a solid pace. Pressure from higher operating expenses pushed firms to hike selling prices for the first time since April.
The seasonally adjusted S&P Global Greece Manufacturing Purchasing Managers’ Index® (PMI®) posted 50.3 in September, down from 52.9 in August, and signaling a further loss of momentum across the sector. Operating conditions improved only fractionally on the month, and to the least marked extent in the current eight-month sequence of growth.
Contributing to the fall in the headline figure was a considerable slowdown of new order growth at Greek manufacturers during September. Client demand reportedly slumped amid reduced purchasing power at customers and subdued domestic interest following severe weather. Weighing on total new sales was also a renewed decline in new export orders. Challenging demand conditions in key export markets began to drag on interest in Greek manufactured goods, according to respondents.
As a result, firms increased their output levels at a softer pace at the end of the third quarter. In some instances, alongside less substantial demand, firms also noted that damage caused by flooding had impacted supply chains and production capabilities. Similar to the trend seen for new orders, the rate of growth in output was the slowest in the current eight-month sequence of increase.
Although firms reportedly expanded their workforce numbers to support the processing of backlogs of work, the rate of job creation slowed to the weakest since February in September. Still, work-in-hand fell at the fastest pace in seven months amid softer new order growth.
September data saw a renewed rise in output charges at Greek manufacturers. The increase in selling prices was modest overall and reflected the pass-through of greater input costs to customers following a further solid uptick in operating expenses.
Some companies noted that material shortages increased during the month as the availability of certain components was hampered by recent flooding. Such shortages, alongside greater energy and fuel costs, pushed input prices up, according to panellists.
Damage caused by flooding and other severe weather events in Greece led to a further deterioration in supplier performance in September. Lead times lengthened only marginally, however, as softer demand for inputs on the whole led to some reports of improving delivery times.
At the same time, input buying rose at only a marginal pace, as holdings of both pre- and post-production inventories fell at sharp rates.
Supply chain concerns following recent weather events and softer demand conditions dampened business confidence in September, as expectations for the year-ahead outlook for output slipped to a ten-month low.
Source: S&P Global
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