An apprentice welder works at a training center in Siegburg, Germany.
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LONDON – Eurozone trade activity grew at its fastest pace in 15 years this month, according to preliminary data released on Wednesday.
The 19 economies have recently taken various steps to reopen their economies as immunization programs continue to accelerate. France has, for example, lifted the nighttime curfew and the need to wear a face mask outside. Italians can now have their coffee at the counter, as is their tradition, after resuming meals inside. In addition, more and more tourists are now welcomed in the region.
The IHS Markit flash composite PMI index for the euro area, which examines activity in manufacturing and services, reached 59.2 in June from 57.1 in May. A reading above 50 represents an expansion in economic activity.
This is the highest reading in 180 months, or 15 years, according to IHS Markit.
“Very encouraging signs of an accelerating recovery,” Chris Williamson, chief economist at IHS Markit, told CNBC’s “Street Signs Europe” Wednesday.
“The fastest growth we’ve had in business activity in 15 years, demand as measured by new orders is also growing at the fastest rate in 15 years, which is propelling this, and job growth is growing. ‘is also accelerating, so it is a global recovery which is also gaining momentum, “he added.
The European Central Bank estimated earlier this month that the eurozone will grow at a rate of 4.6% this year and 4.7% next year – a more solid outlook compared to its March assessment.
However, economic uncertainty persists, not least due to the variant of the delta coronavirus which results in higher infections, as well as labor market shortages – even in countries with relatively high unemployment rates.
“What we have seen so far is certainly the hospitality sector, hotels, restaurants, which seem to be the hardest hit. Strong pressure there to try to have enough staff. quickly to meet what is an increase in demand and it will only get worse as we see these economies reopen again in July, ”said Williamson.
The composite flash production index for France stood at 57.1 in June, against 57.0 in May, an 11-month high. The latest lift of Covid-19 restrictions has contributed to a higher number of sales. Additionally, new orders from manufacturers have seen one of the fastest increases since the pandemic began in 2020.
Joe Hayes, senior economist at IHS Markit said: “The French economy has experienced its best quarterly performance since early 2018.”
“With vaccination rates on the rise, survey data suggests that companies are increasingly confident that the stage is set for an economic recovery,” he said, while adding that ” the recovery could face slowdowns if supply ends up dragging the economy. “
Meanwhile, Germany’s composite production PMI index hit 60.4 in June from 56.2 in May, hitting a high of 123 months.
“The further easing of Covid-19 restrictions has given the German economy a further boost, with the ‘flash’ PMI reaching its highest level in more than a decade. And with containment measures that Expected to be further lifted in July, this strong momentum is set to continue into the third quarter, ”Phil Smith, associate director at IHS Markit, said in a statement.