Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Euro zone factory growth raced in July despite raw material shortages - PMI

08/02/2021 | 06:17am EDT
FILE PHOTO: VW re-starts Europe's largest car factory after coronavirus shutdown

LONDON (Reuters) - Manufacturing activity across the euro zone continued to expand at a blistering pace in July as the reopening of the economy led to rocketing demand, but supply bottlenecks sent input costs soaring, a survey showed on Monday.

The upbeat survey follows official data on Friday which showed the bloc's economy grew faster than expected in the second quarter, pulling out of a recession caused by the COVID-19 pandemic as curbs to stop the virus were eased.

Although factories largely remained open throughout pandemic lockdowns the loosening of restrictions designed to quell the spread of coronavirus infections has driven a flurry of demand.

IHS Markit's final manufacturing Purchasing Managers' Index (PMI) dipped to 62.8 in July from June's record high of 63.4 but was above an initial 62.6 "flash" estimate.

An index measuring output, which feeds into a composite PMI due on Wednesday and seen as a good guide to economic health, fell from June's 62.6 to 61.1. Anything above 50 indicates growth.

"The fact that growth of euro zone manufacturing cooled slightly in July after a record-breaking expansion during the second quarter should not itself be a major cause for concern," said Chris Williamson, chief business economist at IHS Markit.

"But the July survey also brought further signs that manufacturers and their suppliers are struggling to raise production fast enough to meet demand, driving prices ever higher."

Widespread shortages of materials and poor transport availability made it a seller's market and pushed the input prices index up to 89.2 from 88.5, its highest reading since the survey began in June 1997. Prices charged for finished goods also increased at a record rate.

Inflation shot past the European Central Bank's 2% target last month, accelerating to 2.2%, according to official preliminary data.

Despite rising prices, demand remained very strong and to try and meet that surge factories increased headcount at the fastest pace in the survey's history.

But the shortage of raw materials manufacturers need meant they were unable to complete orders - despite depleting stocks of purchases and finished goods.

"Capacity constraint indicators continue to flash red. Input shortages worsened again in July at a near record rate and July saw another near-record rise in backlogs of work," Williamson said.

(Reporting by Jonathan Cable; Editing by Toby Chopra)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.23% 0.61947 Delayed Quote.-1.59%
BRITISH POUND / EURO (GBP/EUR) 0.00% 1.17211 Delayed Quote.4.56%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.05% 0.670187 Delayed Quote.3.72%
INDIAN RUPEE / EURO (INR/EUR) 0.34% 0.011551 Delayed Quote.2.67%
US DOLLAR / EURO (USD/EUR) 0.47% 0.850196 Delayed Quote.3.50%
Latest news "Economy & Forex"
12:48pU.S. House panel to probe oil companies over climate disinformation
RE
12:41pEQT-owned chemicals group Azelis sets IPO price; valued at over $7 bln
RE
12:36pMore money on way for Bernard Madoff victims, total payouts top $18 billion
RE
12:36pGM extends EV Bolt production halt to mid-October
RE
12:34pDutch online grocer Picnic raises $706 mln from investors, Gates Foundation
RE
12:33pU.S. to award Newark flights to low-cost carrier to spur competition
RE
12:23pFreddie Mercury NFTs go on sale for AIDS charity
RE
12:22pA FLEXIBLE MONETARY POLICY AIDED ECONOMIC RECOVERY FROM THE PANDEMIC : Dr Patra, RBI Deputy Governor RBI remains committed to maintain liquidity surplus till credit demand recovers: Dr Patra, RBI Deputy Governor
PU
12:22pInsuring a Billion Lives by Improving Awareness, Assurance, Availability and Affordability
PU
12:22pCII CONFEDERATION OF INDIAN INDUSTRY : Industry participation fundamental to India's newspace liftoff to new heights The International Conference & Exhibition on Space 2021 on the theme ‘Building Newspace in India, organised by CII, brought to the fore the new business avenues for Indian industry in India's newspace economy
PU
Latest news "Economy & Forex"