Eurozone business growth hits 15-yr high as restrictions ease, demand unleashed



by   |  VIEW 502

Eurozone business growth hits 15-yr high as restrictions ease, demand unleashed

On Monday, a survey data from IHS Markit Ltd., the London-based British-American financial information provider, had unveiled that the 26-member bloc’s business activities had accelerated by the steepest pace in more than a decade and a half in June, as a widespread ease of restrictions following an acceleration in vaccination campaigns seemingly had led to a torrential high-tide in the Euro zone’s vast service sectors.

Nonetheless, followed by reveal of the IHS Markit survey data, several analysts were quoted saying that a sharp shoot-up in growth momentum in the Euro zone’s dominant service industry came at the expense of a potentially noxious inflationary pressure which could bring a rate-hike into the play in a near term, eventually terminating an era of a market-dominated flow of incomplex capitals.

In factuality, an intensifying inflationary pressure in the Euro zone appeared to be mounting due to a chronic labour shortage amid massive Government stimulus alongside a lack of raw materials stemming a steeper-than-anticipated supply chain disruption.

Euro zone business activities soar to strongest since June 2006

According to the IHS Markit survey data revealed earlier in the day, the British-American financial information provider’s index for eurozone flash composite PMI (Purchasing Managers’ Index), a closely monitored indicator for a salubrious economic growth, space-dived to 59.5 in June, marking up the highest level since June 2006, compared to a figure of 57.1 clocked in May.

Aside from that, the survey data had also beaten an analysts’ projection of 59.2, while Germany’s service sectors’ activities had expanded by the strongest pace since March 2011 last month and French service sectors’ activities had reached their pre-pandemic level.

Meanwhile, adding that the IHS Markit survey data had illustrated a substantial scale of recovery in the bloc’s economy, an Oxford Economics analyst Mateusz Urban said, “The index was at its 15-year high, confirming that the recovery in bloc's economy is well underway.

At the same time, backlogs and producer price pressures show no signs of abating. The services PMI sub-index posted an increase. This indicated that the sector has benefited from easing of restrictions and increased consumer optimism on the back of advancing vaccination campaign”.