Greece remains top of worldwide manufacturing PMI rankingsChristian Fernsby ▼ | October 16, 2019
September PMI data showed the Greek manufacturing sector yet again providing a spark of light in the general gloom of the wider eurozone goods-producing sector.
Europe Solid growth in output and a further rise in Greece
Topics: Greece manufacturing PMI
Taking a deeper look into economic conditions across Greece, however, highlights ongoing likely difficulties in regaining sufficient growth to fully emerge from a decade of setbacks.
Going forward, recent projections from the Greek government signal expectations of 2.8% economic growth in 2020.
Our view, although more downbeat at 1.7%, takes into account forecasts of ongoing trials for exporters and expectations that unfavourable external demand conditions will continue into next year.
Another factor behind caution will be the speed and effectiveness of reform.
The newly-elected government has promised vast swathes of reforms aimed at taxation and making Greece a more attractive place to invest, and although investor confidence is returning following more upbeat economic data, some of those looking to spend will most likely wait for positive results before allocating any meaningful capital investment.
The IHS Markit Greek Manufacturing PMI continued to top the global rankings table for all comparable surveys in September.
The solid improvement in operating conditions was in stark contrast to other European economies such as Italy, Spain and Germany where contractions were registered.
Moreover, Greek firms continued to signal strong expansions in output and new orders.
Most surprising was a further upturn in new export orders.
Survey respondents across the eurozone have increasingly noted weak external demand conditions, with many highlighting a reluctance to place orders amid trade wars and greater uncertainty.
As the Greek economy is still in the process of recovering to pre-crisis levels, manufacturers are continuing to signal an upturn in exports according to PMI data, with demand levels growing from a lower base.
This may, in part, explain why Greek manufacturers are continuing to signal export growth, when their eurozone counterparts are highlighting lacklustre demand. ■