Economic sentiment still improving

Greek economic sentiment rebounded for the third straight month in June, with the index compiled by the Foundation for Economic and Industrial Research (IOBE) reaching 59 points, up from 49.2 in May. The index has climbed to its highest level since November 2008, after beginning in April to reverse a 12-month decline. IOBE reports an improvement across all sectors, with the greatest in construction and retail trade and the smallest in industry and services. In industry there has been a significant rebound in forecasts for production and a smaller one in estimates of the current level of demand and orders, while inventories also appear to have dropped. Services are seeing more optimistic expectations of businesses regarding future demand, while there has been a greater improvement in assessments of current demand. Estimates of sales in retail trade are showing a major improvement, while a considerable amount of stock has already been sold. On the other hand, expectations regarding demand in the next three months are marginally lower. Construction is seeing a significant rebound in expectations for employment and in the works schedule, even though activity is still at relatively low levels. There has also been a considerable improvement in consumer confidence, which has bounced back to June 2008 levels of -45 points. Consumers expect their financial situation and the country’s economy to improve, while propensity to save has also increased.