Latest data released by Markit – 5 July 2021
- Composite PMI 59.5 vs 59.2 prelim
A slight revision higher on the balance of things and that marks the quickest growth in Eurozone activity in 15 years, with both the manufacturing and services sectors showing marked improvement as virus restrictions are loosened.
That said, supply disruptions are leading to higher cost inflation and that remains a threat to the recovery momentum if it continues persistently in the months ahead.
“Europe’s economic recovery stepped up a gear in
June, but inflationary pressures have also ratcheted
“Business is booming in the eurozone’s service
sector, with output growing at a rate unsurpassed
over the past 15 years. Added to the impressive
growth seen in the manufacturing sector, the PMI
surveys suggest the region’s economy is firing on
all cylinders as it heads into the summer.
“Service sector growth has picked up across the
board among the countries surveyed, with hard-hit
sectors such as hospitality and tourism now coming
back to life to join the recovery as economies and
travel are opened up from virus-related restrictions.
“A wave of optimism that the worst of the pandemic
is behind us has meanwhile propelled firms’
expectations of growth to the highest for 21 years,
boding well for the upturn to gain further strength in
“Firms are increasingly struggling to meet surging
demand, however, in part due to labour supply
shortages, meaning greater pricing power and
underscoring how the recent rise in inflationary
pressures is by no means confined to the
manufacturing sector. Service sector companies
are hiking their prices at the steepest pace for over
20 years as costs spike higher, accompanying a
similar jump in manufacturing prices to signal a
broad-based increase in inflationary pressures.”