Good economic news from Europe
The easing of greater restrictions brought life back to the EU’s dominant service industry, and the research showed on Monday. Eurozone companies increased their activity at the fastest rate in the last 15 years in June. That increased growth was due to rising inflationary pressures due to labor shortages and disruptions in supply chains caused by the pandemic.
IHS Markit’s Final Composite Purchasing Manager’s (PMI) index, considered an excellent indicator of economic health, jumped to 59.5 last month from 57.1 in May, the highest level since June 2006. That was well above estimates of 59.2 flashes and well above the 50 limits, separating growth from declining activity.
The index was at its 15-year high, confirming that the recovery of the EU bloc’s economy is underway. This indicated that the sector has benefited from easing restrictions and increased consumer optimism on the back of advanced and successful vaccination. At the same time, backlogs and pressures from producer prices show no signs of easing, “said Mateusz Urban of Oxford Economics.
Accelerating vaccination programs on the continent has meant that governments have allowed much of the service industry to reopen, and PMI in the sector has climbed to its highest level since July 2007.
Activity in the German service industry grew at its fastest pace since June 2011, while in France, the sector grew after the COVID-19 restrictions were eased.
In Britain, meanwhile – outside the eurozone and the European Union – post-lock returns for service firms eased slightly in June, but price pressures have jumped the most so far.
Global stocks held at a record high on Monday, as concerns about the Delta variant of COVID-19 were less than the positive sentiments of increased business activity in the eurozone.
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