The growth of activity in the euro area reached the highest rate in 15 years

Growth in activity in the euro area accelerated again last month, reaching its highest rate in 15 years. This was helped by the lifting of other restrictions related to the new coronavirus and the acceleration of vaccination, which helped the dominant service sector in the bloc. This was shown on Wednesday by the updated results of the IHS Markit survey. However, Markit recalls that supply chain problems and labor shortages have caused input costs to rise sharply in July in more than two decades. And optimism in companies has also hit concerns about new restrictions on the rapidly spreading delta variant of the new coronavirus. According to the latest IHS Markit survey, the combined Purchasing Managers Index (PMI) for the service and manufacturing sectors in the euro area, which is a key indicator of the future activity of companies, after seasonal adjustment in July 2021 it climbed to 60.2 points from 59.5 points in June. It reached its highest value since June 2006. The adjusted value of the index is slightly lower than 60.6 points in a quick estimate, but remains well above the limit of 50 points, which separates the growth in the sector from its decline. Among key euro area members, Germany, the bloc's largest economy, had the highest combined PMI in July at 62.4 points. This is slightly less than 62.5 points in a quick estimate, but at the same time a new German record. Spain was second with a PMI of 61.2 points, a two-month low. This was followed by Italy 58.6 points (42-month high) and France with a PMI of 56.6 points, which was at least three months and less than 56.8 points in a quick estimate. The survey further revealed that the PMI of the dominant services sector, which covers a range of companies from large banks to small restaurants and repair shops, also rose less in July, to 59.8 from 58.3 points in June, while a preliminary estimate indicated that it would reach 60.4 points. However, the July value of this index is still the highest since June 2006. "The European services sector is reviving. The easing of restrictions and further progress in vaccination are increasing the demand for a wide range of services, especially in tourism and hospitality, ”said Chris Williamson, chief economist at IHS Markit. The PMI of the manufacturing sector also rose to 69.9 points from 69.8 points last month, reaching an almost 21-year high. At the same time, however, the widespread shortage of input materials and transport problems have contributed to the largest increase in the sub - index of input prices since the beginning of the survey in June 1997. Inflationary pressures were also felt by services companies, and the combined input price index rose to 69.9 points in July from 69.8 points, its highest level in almost 21 years. The biggest risk to the euro area's economic outlook is new coronavirus variants. The delta stock is already spreading across Europe, with the index of business expectations in services falling to a three-month low of 69.1 from 72.7 points.