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Private sector growth at its highest in over three years

Credit: Belga

Private sector activity in the eurozone recorded its strongest growth in more than three years in May, thanks to the gradual lifting of health restrictions, according to Friday’s first estimate of Markit’s composite PMI.

PMI (Purchasing Managers’ Index) data are released monthly, ahead of official economic figures.

Markit’s analysis found that the index rose to 56.9 from 53.8 in April. A number below 50 means activity is contracting, while a number above that means it’s rising.

The latest reading was the highest since February 2018, and indicated a third successive month of output growth, according to Markit.

“New orders rose to a level not seen for nearly 15 years and business optimism for the year ahead continued to reach new highs,” the company said in a statement, while also expressing concern about upward pressure on prices.

“Price indicators rose further to record highs in manufacturing, as demand continued to outstrip supply for many goods and services,” the research firm said.

“Virus-related restrictions were eased in May to the lowest level since October, facilitating a particularly sharp improvement in service sector activity while business expansion remains close to record highs,” said Chris Williamson, chief economist at Markit.

“Growth would have been even stronger if not for record delays in supply chains and difficulties in restarting factories quickly enough to meet demand,” he added.

“This imbalance between supply and demand has increased pressure on prices.”

The Brussels Times