Euro zone manufacturing activity expands at a record pace in May

Euro zone manufacturing activity was seen expanding at a record pace in May, a study suggested on Tuesday, indicating growth would have been even faster without supply bottlenecks that have led to an unprecedented rise in input costs.

Europe’s economy has been badly hit by the coronavirus pandemic crisis in the past year, forcing the services sector to shut down operations. However, factories remained open, and pandemic-triggered restrictions in several countries have gradually been eased.

IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) soared to 63.1 in May from a 62.9 reading in April. The recent reading surpassed the initial 62.8 “flash” estimate and the highest reading since the survey began in June 1997.

An index measuring output lowered to 62.2 from the previous 63.2 output. Anything above 50 indicates growth.

A study said that the euro zone was anticipated to bounce back from a double-dip recession this quarter. However, a projected rise in price pressures in 2021 was not seen to be sustainable, with inflation forecast to ease substantially.