Eurozone business activity rose at its weakest pace in 5 months in Sept as curbs to limit the Delta variant of COVID-19 hurt demand, and supply chain constraints increased input costs.
- IHS Market’s flash Composite PMI dropped to a five-month low of 56.1 in September from 59.0 in August.
- Chris Williamson, the chief business economist at IHS Markit, stated that September’s flash PMI highlights an unwelcome mix of sharply slower economic growth and steeply rising prices.
- Williamson further expects growth looks likely to weaken further in the coming months if the price and supply headwinds show no signs of easing off, more so if accompanied by any rise in virus cases.
- A sub-index tracking input costs rose to 70.5, its highest in over two decades. That implies supply distortions are far from resolved, and the trend of higher inflation will likely remain for a few months.
A PMI covering the bloc’s service industry plunged to 56.3 in September from 59.0 in August, caused by weakening demand and worsening supply chain constraints.
Euro Stoxx 50 up +0.88%, EURUSD up +0.26%Source: IHS Markit