Greek retailers and consumers in the doldrums
The economic climate improved slightly in July due to better growth expectations in industry, construction and services, according to a report by the Foundation for Economic and Industrial Research (IOBE).
However, this optimism is not reflected in retail commerce, where expectations have clearly deteriorated.
Overall, the economic climate index improved to 90.8 from 87.6 in June, still below the 100 threshold separating expectations of growth from expectations of recession.
Construction and services did better than industry, with businessmen active in both sectors appearing to believe that their business will finally begin to get out of the doldrums they found themselves stuck in earlier this year amid the first surge in the pandemic.
Retail trade stands out, however, for its bad climate. The sector’s expectations sub-index dropped to 70.4 from 84.4 in June. This means the sales outlook has changed for the worse and stocks of unsold products are rapidly growing.
Consumer confidence also took a hit in July, with negative sentiments outpacing positive ones by 34.7% (from 27.7% in June), while last year the difference – again in favor of negativity – was 15%. This new drop in sentiment makes Greek consumers the most pessimistic in the European Union, followed by Bulgaria’s (32.2%). Consumers in Slovenia, Portugal and Spain are also among the EU’s top five in terms of their pessimistic outlook.
The difference between Greek consumers who said their household finances are worsening versus those who say they are improving rose to a (negative) 27.2% in July, from 21% in June. Among the surveyed households, 44% said their finances took a slight or serious turn for the worse, while just 4% reported a slight improvement.
Exporters have also turned pessimistic. The TCI (Trade Confidence Index) compiled by the Association of Northern Greek Exporters stood at 86.8 in the first half of the year (over 100 represents optimism and under 100, pessimism), down from 141.5 a year ago.
In the manufacturing sector, purchasing managers also showed a slight trend toward pessimism. This was due to shrinking production and new orders. The uncertainty surrounding the pandemic has clearly affected clients, both domestic and international.