Macro roundup: Building boom

Who needs data anyway, when you can have anecdotes?

We’ve been noting for a while here that all the indicators out of Greece’s building sector suggest that construction’s recovery from the debt crisis decade has stayed strong, despite the pandemic.

Whatever the data says, until you see something with your own eyes, the instinct will always be to stay guarded against “lies, damn lies and statistics”.

It just so happens that I can see evidence of this outside of my office window as I type these words — one of two residential buildings that are currently going up within one block from where we live.

There are more indications of this boom — yes, I’m going to start calling it a “boom” now — in data from the Hellenic Statistical Authority today showing pick ups in several cost indices related to construction.

The material const index in the construction of new residential buildings increased 1.3 percent in March from a year earlier, with perhaps signs of a bottleneck in copper pipes, where prices grew 12.8 percent.

Meanwhile, the price index of work categories in construction of new residential buildings rose an annual 0.8 percent in the first quarter, while the costs index in the construction of new residential buildings increased 1.3 percent.

Ok, so those figures don’t exactly represent runaway inflation (let’s call it a “nascent boom”). But for context, let’s remember that March’s EU-harmonised consumer price index fell 2 percent from a year earlier, despite the recent spike in the index for the rest of the eurozone. Greece remains a deeply deflationary environment overall.

Never mind the data though. My wife this week called a carpenter who’s done good work for us in the past. “It’s a building boom, he cannot believe how much work he has,” she reported back to me. So this is why I shall spend the weekend installing an indoor climbing wall (and trying to figure out what to do with the displaced sofa).

Data summary

  • We got the first official reading of Greece’s 2020 fiscal numbers from Elstat yesterday:

    • The public sector debt ratio rose to 206 percent of gross domestic product from 181 percent in 2019

    • The budget deficit was 9.7 percent of GDP following a surplus of 1.1 percent the year before

    • The primary deficit, which excludes interest, was 6.7 percent after the government ran a surplus of 4.1 percent in 2019

  • The balance of payments figures for March showed that in the first two months of the year the current account deficit came to 1.28 billion euros, which is close to half the size it was in the first two months of 2020. This was mostly due to the drop in imports.

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Next two weeks’ key data

Monday, April 26:
  • Jan-March central government final budget execution (Finance Ministry)

  • Fourth quarter non-financial accounts of institutional sectors (Elstat)

Thursday, April 29:
  • March bank lending and deposits (Bank of Greece)

  • February retail sales (Elstat)

  • April consumer confidence and economic sentiment (European Commission)

Tuesday, May 4:
  • April manufacturing PMI (IHS Markit)

Elsewhere on the web

  • The FT reports that Halloumi diplomacy in Cyprus seems to be backfiring among Turkish Cypriot cheesemakers

  • Lots of movies are to be filmed in Greece

Programming note

Next week is the start of Orthodox Easter, so the roundup won’t go out as normal on Friday, but will return in two weeks, on May 7.

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