Eurozone business in July grows at fastest pace in 15 years

London

EUROZONE business activity roared in July, expanding at its fastest pace in 15 years, as the lifting of more coronavirus restrictions and an accelerated vaccine drive injected life into the bloc's dominant service industry, a survey showed.

But supply chain disruptions and labour shortages meant input prices surged at the fastest rate in over two decades and fears of further curbs to contain the more infectious Delta variant of Covid-19 dented optimism.

IHS Markit's final composite Purchasing Managers' Index (PMI) climbed to 60.2 last month from June's 59.5, its highest level since June 2006, well above the 50 mark separating growth from contraction, though slightly below a 60.6 "flash" estimate.

With more of the services industry reopening, the sector's PMI index rose to its highest final reading since June 2006. "Across the bloc, the services PMIs remain comfortably in expansionary territory as the services sector benefits from easing restrictions," said Katharina Koenz at Oxford Economics.

Services activity in Germany, Europe's largest economy, expanded at a record pace. In France, the bloc's second-biggest economy, growth remained elevated but dipped slightly more than originally thought.

Italy's services sector grew in July at its fastest rate for 14 years and although Spain's growth was off June's highs it remained strong.

In Britain, outside the eurozone and the European Union, private-sector growth slowed sharply due to supply-chain bottlenecks and high worker absences prompted by Covid-19 isolation requirements. REUTERS