In February, Greece's manufacturing sector experienced a robust recovery, as indicated by the latest S&P Global PMI® data. This growth was primarily fueled by stronger increases in output and new domestic orders, making it the fastest growth period in nearly a year. However, the report indicates that while domestic demand surged, new export orders declined, which poses questions about the sustainability of this recovery. Firms responded to the growing demand by increasing their input purchases and employment levels, yet faced challenges in finding qualified personnel, which negatively affected job creation and resulted in a backlog of unprocessed work.

Input costs have been rising more rapidly, largely due to hikes in metal tariffs, contributing to increased operational expenses for manufacturers. Despite this, companies have seen a moderation in selling price increases compared to previous months, suggesting that while input costs are growing, the ability to pass these costs onto consumers may be diminishing. The seasonally adjusted S&P Global Purchasing Managers’ Index underscores the complex dynamics at play in the manufacturing sector, balancing rising costs against the realities of market demand.

Overall, the stronger inflow of new orders has led to a more optimistic production outlook for the sector. However, the challenges in workforce recruitment and rising input costs might temper the pace of this recovery moving forward. Stakeholders in the Greek economy will be watching closely to gauge whether this positive trend can be sustained in the face of ongoing economic pressures and labor market constraints.