ECONOMY

Consumer confidence drops on likely impact of social security reform

consumer-confidence-drops-on-likely-impact-of-social-security-reform

Greece’s consumer confidence index took a tumble in January, as developments on the social security front have dented forecasts for household finances in the 12 months ahead, the Business and Consumer Survey of the Foundation for Economic and Industrial Index (IOBE) showed on Monday.

The index stood some 15 points below the level it had recorded a year earlier, which IOBE attributes to households factoring in the expected contraction in family incomes.

By contrast, the economic sentiment index showed a significant improvement last month, climbing to 91.6 points from 87.1 points in December, while still lagging the 95.9-point level of a year earlier. The picture of stability recorded over the last few months remains the same, although expectations are generally below last year’s, IOBE observed.

Manufacturing is also in a consolidation phase, as the procurement managers index (PMI) by Markit showed. Operating conditions remained the same in January as in December, and there was an acceleration in the job creation rate up to the fastest level seen since July 2007, albeit still quite weak.

“It is encouraging for enterprises that the number of employees has grown at the fastest pace recorded since July 2007, while import prices have declined for the first time in a year,” commented Samuel Agass, the Markit economist who conducts the PMI survey.