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Eurozone Business Activity Growth Hits Highest Level in 21 Years

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Eurozone Business Activity

Business activity grew for the fourth straight month in July to hit a 21-year high, as more firms resumed operations amid the economic reopening from COVID-19 restrictions.

Source: IHS Markit

VGK is up 0.76%, while EZI is up 0.99%.

The headline IHS Markit Eurozone Composite PMI climbed to 60.6 in July, its highest since July 2000. This compares with the 15-year high of 59.5 in June.

Growth is in line with the steady easing of COVID-19 restrictions, with the most relaxed conditions recorded in July from the peak in April. Demand also rose as new orders grew the fastest since May 2000.

The growth was led mainly by the service sector which recorded a 15-year high, after travel restrictions were eased. Manufacturing grew for the 13th straight month.

IHS Economist Chris Williamson said the eurozone is benefiting from a “growth spurt”,  but noted that supply chain issues could dampen production and raise costs.

Expectations for the year ahead fell to a five-month low, due to the growing worries about the COVID-19 Delta variant. The resurgence of the pandemic could also hit global supplies.

The Activity Index grew to a 181-month high of 60.4; the Manufacturing Output Index down to a five-month low of 60.9, and the Manufacturing Index down to a four-month low of 62.6.

 

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