Eurozone business activity stays strong in August

Eurozone business activity held strong in August despite concerns over the Covid-19 delta variant and global supply chain woes.

IHS Markit's final composite purchasing managers' index fell to 59.0 last month, down from July's 15-year high of 60.2 and short of the 59.5 reading in the PMIs "flash" estimate.

"It was another solid result for euro area businesses in August," said IHS Markit's Joe Hayes.

"Another strong quarter-on-quarter rise in GDP is on the cards for the third quarter, and we're certainly on track for the eurozone economy to be back at pre-pandemic levels by the end of the year, if not sooner."

Hayes added that the benefit of looser lockdown restrictions had fuelled "two of the best expansions since mid-2006 in July and August". However, he added that a step down after the PMI's preliminary number indicated that this growth momentum was fading.

"While growth will naturally lose some impetus as the post-lockdown boom peters out, there are a number of other downside factors at play. The delta variant has taken hold in Europe, while further material shortages and transport bottlenecks continue to restrain business activity," said Hayes.