Eurozone manufacturing PMI up at 63.1 in May

By Gokhan Ergocun

ISTANBUL (AA) - The eurozone manufacturing sector’s Purchasing Manager Index (PMI) posted an increase to 63.1, up from 62.9 in April, a London-based global data company said on Monday.

"The eurozone manufacturing economy experienced a new record improvement in operating conditions during May," a report by IHS Markit said.

"The headline PMI recorded 63.1 and its highest reading in the survey history. The headline index has now recorded readings above the 50 no-change mark that separates growth from contraction for 11 months in succession," it added.

While all three market groups posted strong improvements in operation conditions during the month, investment goods producers were best-performers, seeing rapid gains in both output and new orders.

Intermediate and consumer goods categories also posted stronger growth in the month.

Among countries, the Netherlands posted the highest PMI with 69.4, followed by Austria (66.4), and Germany (64.4).

Stemming from higher inflation rates and widespread product shortages, the report highlighted, that average input costs continued to increase.

"Boosted by strong market demand, manufacturers took advantage of improved pricing power by raising their own charges at the fastest rate in more than 18 years of data availability," it noted.

It also said manufacturers' future confidence was very positive in May.

Chris Williamson, the chief business economist at IHS Markit said: "Surging output growth adds to signs that the economy is rebounding strongly in the second quarter.

"However, May also saw record supply delays, which are constraining output growth and leaving firms unable to meet demand to a degree not previously witnessed by the survey."

He said high demand and supply problems are together pushing up prices.

Williamson added that price pressures will ease after the pandemic lose its influence and supply chains improve.