Eurozone PMI Manufacturing was finalized at 63.4 in June, up from May’s 63.1. The index also set fresh record for a fourth successive month. Markit said production increased sharply whilst job growth hit survey peak. Prices also rose at record rates as supply-side constraints persisted.
Looking at the member states, PMI manufacturing of the Netherlands dropped to 2-month low at 68.8. Austria hit record high at 67.0. Germany (65.1), Ireland (64.0), Italy (62.2), Spain (60.4) France (59.0) and Greece (58.6) all posted strong readings.
Chris Williamson, Chief Business Economist at IHS Markit said: “The sheer speed of the recent upsurge in demand has led to a sellers’ market as capacity and transportation constraints limit the availability of inputs to factories, which have in turn driven industrial prices higher at a rate not previously witnessed by the survey… Encouragingly, there are several survey indicators which add to hopes that the current spike in prices will prove transitory.”
“Widespread issues such as port congestion and a lack of shipping containers should soon fade as the initial rebound from the pandemic passes. Similarly, recent months have seen safety stock building as companies seek to protect themselves against potential future supply-chain disruptions, which has exacerbated the imbalance of demand and supply in the short-term. Once sufficient stocks are built, this effect should likewise fade.
“Finally, we have also seen the expansion of capacity via record employment growth and greater capital expenditure on business equipment and machinery. This expansion should raise output in sectors that are currently straining to meet demand, and hence remove some of the upward pressure on prices for these goods.”
