Eurozone manufacturing hits record high - PMI

Eurozone manufacturing activity hit a new high in June but prices rose at record rates as supply constraints persisted, a survey showed.

IHS Markit's eurozone manufacturing purchasing managers' index rose to 63.4 from 63.1 in May and was firmer than an earlier "flash" figure of 63.1.

Production increased sharply and jobs growth hit a survey peak. Confidence about future output edged higher and was close to April's survey record as economies reopen from the pandemic.

Investment goods producers recorded the strongest growth followed by intermediate goods. Consumer goods lagged but growth was the strongest since 2000.

Output was particularly strong in Germany and the Netherlands and was driven by exports, which rose at their third-fastest rate on record.

Input prices rose at a survey record based on rising demand and supply constraints for capacity and transport. Employment rose at the strongest pace recorded in the survey.

Chris Williamson, IHS Markit's chief business economist, said: "Eurozone manufacturing continued to grow at a rate unbeaten in almost 24 years of survey history in June as demand surged with the further relaxation of Covid-19 containment measures and vaccination progress drove renewed optimism about the future.

“However, the sheer speed of the recent upsurge in demand has led to a sellers’ market as capacity and transportation constraints limit the availability of inputs to factories, which have in turn driven industrial prices higher at a rate not previously witnessed by the survey."

Williamson said constraints were likely to fade as port congestion clears and stock building recedes because companies think they have enough stock.