Greek factory output grows but demand stays weak in October, PMI shows

ATHENS (Reuters) – Greece’s manufacturing sector saw a renewed expansion in output in October driven by producers efforts to build up stocks, but subdued demand persisted due to reluctance of key customers, S&P Global reported on Friday.

The seasonally adjusted S&P Global Greece Manufacturing Purchasing Managers’ Index (PMI) rose to 51.2 in October from 50.3 in September. A reading above 50 indicates growth in activity, while below 50 signals contraction.

Output returned to growth following a slight contraction in the previous month, driven by efforts to build up stocks of finished items. However, new orders declined for a second consecutive month, with both domestic and export demand weakening. New export orders fell for the first time in 10 months, particularly impacted by hesitancy in key markets like Germany.

Despite weaker demand for inputs, retrenchment did not spread to employment as manufacturers created jobs amid stronger business confidence in the year-ahead outlook,” said Siân Jones, Principal Economist at S&P Global Market Intelligence.

Encouragingly, inflationary pressures eased, with input cost inflation softening for the third month and selling prices rising at the slowest rate in over a year. This allowed firms to price goods more competitively, aiming to stimulate sales.

Employment growth resumed, with manufacturers hiring temporary workers and filling vacancies, although at the slowest rate in 2024. The sector also saw a continued decrease in backlogs of work, the fastest since January, as increased staffing and lower new orders enabled firms to process incomplete work.

Despite the challenges, manufacturers expressed increased optimism for future output, supported by planned investments in machinery, advertising, and new product development.

(Reporting by Athens bureau)