Business activity in the eurozone is hovering near a 15-year high, despite slightly cooling this month due to supply pressures, a closely watched survey by IHS Markit showed yesterday.
The purchasing managers’ index (PMI) composite reading measuring corporate confidence slipped to 59.5 this month, just under the robust 60.2 figure given last month. A figure above 50 indicates growth.
The dip was explained in part by some business concern over the effects of the Delta variant of SARS-CoV-2, but especially by demand outstripping supply as activity bounced back vigorously in the 19-nation eurozone.
“Supply chain delays continue to wreak havoc,” IHS Markit chief business economist Chris Williamson said.
Surging demand and supply problems were pushing costs higher, he said, leading to “another near-record increase in average selling prices for goods and services.”
While that could fuel worries about inflation, Williamson said “inflationary pressures may have peaked for now.”
The survey showed service sector growth overtaking that of manufacturing for the first time during the COVID-19 recovery. Jobs growth was at a 21-year peak.
“The sustained upturn in demand and improved prospects due to rising vaccination rates led to buoyant optimism about the year ahead,” IHS Markit said.
Among the eurozone countries, Germany led the survey, although the supply constraints on its vital manufacturing sector were more marked.
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