Sectors guilty of greedflation
Industry, services, construction and entertainment saw profit margins jump in 2021-2022
The pandemic and the energy crisis gave Greek companies an opportunity to significantly increase their profit margins.
The phenomenon of profit inflation or “greedflation” was seen internationally in the period 2021-2022, but it assumed large dimensions in Greece due to the country comparatively small market, which is prone to a lack of sufficient competition.
All consumers, more or less, have experienced this jump in profits. However, the data presented in the report by the governor of the Bank of Greece, which Yannis Stournaras will present on Monday, are impressive.
According to information, the data show that the rate of change of the business profit margin index for the entire economy, from almost zero in 2019 and slightly negative in the first year of the pandemic, 2020, reached 4% in 2021 and rose to 9% in 2022, setting an all-time record. Cumulatively, that is in these particular two years, the profit margin of Greek companies increased by almost 15%. Not all industries had an equal share in this profit party.
During those two years, the protagonist was the services sector, with an increase in margins that approached 30%, while in industry it exceeded 25%. Construction and arts showed profit margin increases of around 15% over the two-year period.
The following sectors showed the greatest increase in profit margins:
• Industry, at a rate of 6.5% in 2021 and 19.5% in 2022.
• Services – i.e. trade, hotels, restaurants, transport and logistics – at a rate of 11.1% in 2021 and 17% in 2022.
• Construction, at a rate of 3.6% in 2021 and 10.4% in 2022.
• Arts and entertainment, at rates of 7.9% in 2021 and 7.2% in 2022.
• Financial and insurance activities, at rates of 2.4% in 2021 and 5.1% in 2022.
On the contrary, in the fields of information and communication, as well as in property-related activities, the profit margins during this crucial two-year period declined.
