Reopening of Economy Sees Eurozone Business Activity Expand the Quickest in 15 Years

Source: IHS Markit Press Release

The Eurozone business activity index in June accelerated the fastest in 15 years from 57.1 in May to 59.2 in June. EURUSD is up 0.11%, DAX is down 0.49%

• Prices of goods and services went up at an unmatched rate as demand exceeded supply.
• Despite increased employment rate over the last 3 years, June witnessed increased backlog work leading to prolonged supply chain process and diminishing warehouse inventories. 
• Easing travel restrictions boosted the economy leading to increased service exports since September 2014.
• Increased demand led to employment of more staff in 5 consecutive months increasing employment figures the highest since August 2018.
• Despite increased employment in June with job gains in manufacturing and services being the highest since 2018, firms had accumulated work backlogs last experienced in 2002.
• Increased work backlogs led to widespread supply shortage for many inputs.
• Manufacturers complained of a longer supply chain process slightly lower than May’s record.
• Supply of final goods decreased the highest since 2009 with high sales draining warehouses.
• Despite demand surpassing supply for a lot of goods and services, inflation continued rising in June.