Greek factory activity expanded robustly in October on the back of strong inflows of new orders, but output growth was somewhat stymied by material shortages and record rates of inflation, a survey showed on Monday.
IHS Markit's Purchasing Managers' Index (PMI) for manufacturing in Greece, which accounts for about 10% of the economy, came in at 58.9 in October, up from 58.4 in September, extending the sequence of growth to eight months.
October's expansion was the third-strongest in over 22 years of data collection.
"Another robust improvement in operating conditions at the start of the fourth quarter. Favourable demand conditions were central to the uptick as COVID-19 restrictions eased in key regions and prompted greater tourist activity," said IHS Markit economist Shreeya Patel.
Firms saw a marked increase in new orders with the upturn in sales broadly in line with that in September and among the strongest in the series history.
Demand firmed up in both domestic and international markets, although output growth was hampered by severe supply constraints with material shortages and delivery delays persisting into the fourth quarter.
Firms added jobs at a marked and faster pace in October, extending the unbroken stretch of job creation to 10 months.
"Supply shortages and delivery delays were again a common theme. Material scarcity will almost certainly threaten manufacturing output growth in the months ahead," Patel said.
Input cost inflation picked up to a series high as material scarcity led to supplier surcharges. Costs for raw materials, particularly plastic, metal, oil, wood, energy and transportation were cited by respondents.
Accommodative demand conditions allowed firms to partially pass on higher costs at a survey-record pace, the survey showed.
"A new record rate of both output price and input price inflation was recorded, but, for now at least, clients are willing to pay the higher charges," Patel said.
(Reporting by George Georgiopoulos; Editing by Hugh Lawson)
