The euro area manufacturing sector reached a new record in April

Growth in activity in the euro area manufacturing sector reached a new record in April, albeit slightly lower than the quick estimate suggested. It was supported by a sharp increase in demand, which led to the recruitment of new employees, but at the same time supply-side constraints led to an unprecedented increase in outstanding orders. This was shown on Monday by the updated results of the IHS Markit survey. While the third wave of the new coronavirus pandemic in Europe has forced some governments to close most of the dominant services sector, factories have remained largely open. According to the final results, the Markit index of purchasing managers from the euro area manufacturing sector rose to 62.9 points in April from 62.5 points in March. Although this is less than 63.3 points in the quick estimate, it is still the highest value of this index since the beginning of the surveys in June 1997. The sub-index of production, which is used in the calculation of the total combined PMI of the euro area and is considered one of the indicators of the "economic health" of the region, fell slightly to 63.2 points in April from a record high of 63.3 points in March. However, it remains well above the 50-point threshold, which separates the growth of activity in a given sector from its decline. "Production in the eurozone is booming," said Chris Williamson, chief economist at IHS Markit. At the same time, however, he drew attention to unprecedented supply problems, which leads to a record increase in unfinished orders in factories. The relevant sub-index, which reaches outstanding orders, rose to 61.5 from 60.4 points, which is its historical maximum.