Latest data released by Markit - 23 August 2021
- Prior 59.8
- Manufacturing PMI 61.5 vs 62.0 expected
- Prior 62.8
- Composite PMI 59.5 vs 59.7 expected
- Prior 60.2
Slight misses but nothing that stands out all too much as the report mainly reaffirms the ongoing robust expansion in the euro area economy still for the time being.
Manufacturing conditions are showing signs of an increased slowdown, with output dropping to six-month lows amid ongoing supply chain disruptions.
But overall demand conditions are solid and while there is some moderation to overall economic conditions, things are still holding up looking towards the latter stages of Q3.
Markit notes that:
"The eurozone's economic recovery retained impressive momentum in August, with the PMI dipping only slightly from July's recent high to put its average in the third quarter so far at the highest for 21 years.
"Although the spread of the Delta variant caused widespread problems across the region, curbing demand and causing further supply issues, firms benefited from virus containment measures easing to the lowest since the pandemic began.
"Supply chain delays continue to wreak havoc, however, leaving companies frequently unable to meet demand and pushing firms' costs higher. These costs, combined with surging demand, led to another near-record increase in average selling prices for goods and services, though there are some welcome signs that these inflationary pressures may have peaked for now.
"Encouragement comes from a second month of job creation at the strongest for 21 years, which reflects efforts by firms to boost operating capacity and meet demand, which should ultimately further help bring price pressures down. The concern is that we are seeing some upward movement on wage growth as a result of the job market gain, which could feed through to higher inflation, and supply delays from Asia in particular look likely to persist for some time to come."
