Eurozone growth in June 2021 was the highest in 15 years
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Eurozone business activity grew at the fastest rate for 15 years in June, according to the latest IHS Markit Flash Eurozone PMI.
The surge in growth unsurprisingly comes as economies relax coronavirus restrictions and vaccine progress boosts confidence. IHS Markit said June saw “surging levels of output across both
manufacturing and service sectors” last month.
Other key observations made by IHS Markit are as follows:
- June marked not only the fourth successive month that the index has posted above the 50.0 nochange mark, but the highest index level since June 2006
- Ireland registered the fastest rate of output growth, even though it edged down slightly on May’s survey record
- All other nations monitored recorded firmer gains in composite activity, led by Spain – the best since February 2000 – and Germany, where growth hit its highest for over a decade
- Italy and France both registered their best performances for nearly three-and-a-half years
- Growth in new business in the private sector was the best for 21 years, according to June’s survey data
- New export business rose at the sharpest rate since composite data were first available in September 2014
- Staffing levels were subsequently increased for a fifth successive month. The rate of expansion strengthened also, reaching its highest level since the start of 2018.
- Confidence in the outlook improved to its highest ever recorded level during June (since mid-2012), as firms signalled optimism that activity will continue to rise sharply in the coming months
Commenting on the latest PMI, Chris Williamson, Chief Business Economist at IHS Markit said:
“Europe’s economic recovery stepped up a gear in June, but inflationary pressures have also ratcheted higher.
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 s 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.”
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