Macro roundup: Shallow confidence

The recovery in Greek economic sentiment has plateaued at pre-pandemic levels

In the last few months, we’ve seen stabilising trends in a lot of economic indicators that were growing strongly in spring, when lockdown restrictions started lifting.

This also applies to the economic sentiment indicator, released by the European Commission, which has plateaued at roughly the level it was at before the pandemic.

Economic confidence swung less in Greece than it did in the rest of the euro-area, where the collapse at the start of the recovery was more dramatic, but where the subsequent rebound was also much sharper. Confidence has also plateaued in the euro area, but at a higher level than before the pandemic.

Scratching beneath the surface, the recovery in confidence in Greece has mostly come from the construction and services sector. The recoveries in consumer, retail and industry confidence have been anaemic, and these sectors remain below their pre-pandemic levels.

By contrast, improvements have been more evenly distributed in the rest of the euro-area — where all sectors are back above their levels going into the pandemic.

The extent of the recovery in confidence in Greece’s construction sector is particularly notable when compared with the rest of the euro area, where it trails other sectors.

However, the rest of the euro area isn’t coming off the back of the kind of construction slump that Greece went through during its debt-crisis decade. Greece entered the pandemic with an incipient recovery in the sector, which the pandemic couldn’t stop from turning into a mini-building boom.

Other data

  • Credit growth continued to slow in August, growing an annual 0.8 percent, compared with 1.2 percent in July.

  • Private sector deposits in August continued their steady rise, growing a further 1.5 billion euros to 173.1 billion euros.

  • There were 9,875 more people who left their jobs in August than were hired, according to the Ministry of Labour. This was partly seasonal, with the tourist season winding down.

  • Greece’s manufacturing PMI dipped slightly to 58.4 in September, from its high of 59.3 the month before. A reading above 50 indicates improved operating conditions in manufacturing.

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Next week’s key data

Friday, Oct. 8:
  • September consumer price index (Elstat)

  • August industrial production (Elstat)

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