Thursday, 23 October 2014

What part of Greece's industrial capacity was lost during the depression?



Quite a lot of commentators, whose views I come across, think that Greece can survive solely on tourism. Well, betting your survival on an industry with such high income elasticity is not ideal or advisable if you ask me. Hence, there are quite a lot of posts concerning manufacturing in this blog regardless of the fact that Greek manufacturing is, well, hopeless. But I am digressing here when the reason that I decided to write this post was an observation I made. 

If one takes a look at capacity utilization for Greek industry then she/he will realize that it has reached levels last seen in 2010.


source: Bank of Greece

Industrial Production on the other hand, if we re-base data to the first month of 2010 tells a different story (the data as a whole are based on 2010 so this won't make much of a difference).


source: Eurostat, own calculations


No matter whether we use industrial production (which is skewed a bit by the incessant fall of electricity production) of manufacturing production, the index currently lies about 15% lower than its level on the first month of 2010.

At first this may come across as a bit of a puzzle but what this differential shows, in my humble opinion, is what percent of production capacity was lost these past five years.

Tuesday, 29 July 2014

Greek tourism: a quasi-worrying print in May.


Greek mainstream press is awash with stories claiming that 2014 will be a bumper year for Greek tourism. It remains to be seen whether this will prove to be the case here (and I wholeheartedly wish that it will be but one particular data print worried me a bit).

Here’s the relevant chart.


source: Bank of Greece


May was the first month that a hefty rise in travel services exports was recorded in 2013. Jump to May 2014 and the growth in relevant exports can be characterized as anemic at best. 

If one cares to look  closer then he/she will find out that the rise in receipts for the Jan-May period was lower than that of non-residents’ arrivals. Something that was not the case in 2013 when on a year-over-year basis receipts rose more than arrivals. This means that receipts per capita fell (thus far) in 2014 while it had risen in 2013.


source: Bank of Greece

Now that the base effect is over, will growth in travel services exports slow to a halt like it did in May? If that is the case then growth estimates could prove to be overly optimistic. Fingers crossed that May’s print was just a blip.