ECONOMY

Greek business sentiments in minor rally

Bolstered by the continued construction boom, Greece’s economic climate index improved to 101.9 points in December last year from 101.7 in the previous month, the Foundation for Economic and Industrial Research (IOBE) said yesterday. The rally in Greek economic sentiments echoed a similar improvement in the eurozone and the European Union, with both indices edging up to 98.8 points from 98.6 and 98.7 respectively. The construction industry underscored its reputation as the most dynamic sector of the Greek economy as the business expectations index climbed to 138.7 points in December, eclipsing other business sectors. «The small increase in the economic climate index came exclusively from the sharp gain in construction,» IOBE said. The improved sentiments in the building sector were based on a marginal increase in scheduled projects and expectations of future work. The continued construction boom was evident in figures released by the National Statistical Service (EYSE) early this week. For the month of August, 3,123 building permits were approved, of which 3,106 were for the private sector, up by 5 percent. Private building activity in terms of volume (in thousand cubic meters) in the first eight months of 2001 rose by 15.7 percent. With mortgage credit continuing to grow strongly and banks battling to increase their share of the housing market with competitive interest rates, the construction sector is expected to remain buoyant for some time. IOBE also pointed to the resurgent confidence in public sector projects based on short-term forecasts of more work on the way and increased secured production. Other business sectors failed to share the construction industry’s optimism. The business expectations index deteriorated for the third consecutive month, reaching levels last seen in mid-1999, with IOBE attributing the decline to shrinking demand, a minor increase in stocks and modest predictions of production over the next three to four months. The foundation warned that the slowdown in industrial activity in 2001 could carry over to the first few months of this year. Retail traders were down in the dumps as well as sluggish sales in the last half of 2001 weighed on the business expectations index for the sector, resulting in a marginal drop. Retailers complained about poor sales and high levels of stocks. EYSE data released on Tuesday showed an 8.1 percent increase in the retail sales index for the first 10 months of 2001.