Euro zone business activity surges by its fastest rate in 15 years

Euro zone business activity has grown at its fastest pace in 15 years this month, according to preliminary data released Wednesday. The 19 economies have recently taken different steps to reopen their economies as the vaccination programs continue to accelerate. France has, for instance, lifted a night curfew and the need to wear a face mask outdoors. Italians are now able to have their coffee standing at a counter, as is their tradition, after indoor dining resumed. In addition, more tourists are now being welcomed into the region.

IHS Markit’s flash composite PMI for the euro zone, which looks at activity across both manufacturing and services, hit 59.2 in June versus 57.1 in May. A reading above 50 represents an expansion in economic activity. This was the highest reading in 180 months, or 15 years, according to IHS Markit. The European Central Bank estimated earlier this month that the euro zone would grow at a rate of 4.6% this year and 4.7% next year — a stronger outlook from its March assessment. However, economic uncertainty remains, notably due to the delta coronavirus variant which is leading to higher infections, and also labor market shortages — even in nations with a relatively high unemployment rate.

The flash France composite output index came in at 57.1 in June, from 57.0 in May, representing an 11-month high. The latest lifting of Covid-19 restrictions contributed to a higher number of sales. Also, new orders placed with manufacturers experienced one of the fastest increases since the pandemic hit in 2020. Meanwhile, the flash Germany PMI composite output index reached 60.4 in June from 56.2 in May — hitting a 123-month high.

Euro zone business activity surges by its fastest rate in 15 years, CNBC, Jun 24