From its annexation into Greece (1881) until the 1970s, Volos grew into one of the largest industrial cities in Greece. The availability of capital, the labour and expertise attracted, and the growing demand for products and services all created the conditions for industrial development.
In the 1880s, the first manufacturing companies were set up, which catered to the local market. Until 1930, there was a huge boom in local industry: New enterprises were established, modernised, and expanded; exports began, and the city entered a period of prosperity.
Investment in industry brought to the fore new social groups, related to either capital or labour: capital holders, mainly Mount Pelion residents who had amassed their wealth in the trade diaspora, residents of other areas of Greece who possessed much-needed industrial know-how; the early factory labour force, consisting of Pelion and Thessaly farmers, as well as foreign workers from Egypt, Asia Minor, and Italy, who came to work in tobacco warehouses, infrastructure projects, and newly established processing enterprises. Refugees poured in to join the working class after the 1922 Asia Minor Catastrophe.
In the 1929–32 crisis, many local businesses were shut down; the declaration of the Second World War in 1940 found the local industry in recession, and only made it worse. In the first decades after the War, formerly flourishing companies collapsed due to economic woes. A second chance for industry came when the industrial area was established in the 1960s.