Greek Manufacturing Expands May Despite US Tariff Export Setbacks

Greece's manufacturing sector has shown robust growth, maintaining expansion since February 2023 with a PMI of 53.2 in May, driven primarily by strong domestic demand despite weakened export orders due to US tariffs and sluggish European markets. Employment in the sector rose at its fastest pace since January 2022, enabling firms to reduce backlogs and increase productivity, while input costs rose at their slowest rate since early 2024, leading to moderated price increases. This growth aligns with broader Eurozone manufacturing trends, where May marked the third consecutive month of output growth, with Greece leading among monitored countries and Spain also returning to expansion. The OECD projects Greece's economy to grow by 2.5% in 2025 and 2.1% in 2026, fueled by foreign investments, tourism, and EU funds aimed at boosting wages and consumption, although risks remain from potential US tariff hikes and economic uncertainties. Business confidence in both manufacturing and services remains positive, with plans for investments in new products and machinery, positioning Greece as a resilient economy amid global trade pressures and a weakening European demand environment.