Latest data released by Markit – 3 May 2021
Output and new orders are holding close to record highs seen in March while input cost inflation is seen ticking higher once again, which should feed back into higher consumer price inflation over the coming months. Markit notes that:
“Eurozone manufacturing is booming, with a new
PMI record set for a second month running in April.
The past two months have seen output and order
books both improve at rates unsurpassed since the
survey began in 1997, with surging demand boosted
by economies opening up from COVID-19
lockdowns and brightening prospects for the year
“However, supply constraints are also running at
unprecedented levels, leading to a record build-up of
uncompleted orders at factories.
“The consequence of demand running ahead of
supply is higher prices being charged by
manufacturers, which are now also rising at the
fastest rate ever recorded by the survey.
“The big uncertainty is how long these upward price
pressures will persist for, and the extent to which
these higher charges for goods and services will
feed-though to consumers.
“Encouragement comes from the sharp increase in
employment and investment in machinery and
equipment signalled by the survey, which suggests
firms are scaling up capacity to meet resurgent
demand. This should help bring supply and demand
more into line, taking some pressure off prices. But
this will inevitably take time.”