(Updated with UK)
Aug 2 (Reuters) – Main final results of Markit surveys of purchasing managers in manufacturing in Europe:
* EURO ZONE – CONTINUOUS GROWTH OF THE MANUFACTURING SECTOR BUT THE CONSTRAINTS ARE INCREASING
LONDON – Manufacturing activity in the euro area continued to grow in July, supported by the easing of sanitary restrictions which is boosting demand, despite disruptions in the supply chain resulting in a rising commodity prices.
The PMI index measured by IHS Markit with purchasing managers stood at 62.8 in July after 63.4 in June and an initial estimate of 62.6.
The sub-index measuring production, which feeds the composite PMI index expected on Wednesday and which is considered a reliable indicator of the state of health of the economy, fell from 62.6 in June to 61.1 last month .
Any index above 50 indicates growth in activity.
“The fact that eurozone manufacturing growth slowed slightly in July after a record expansion in the second quarter should not in itself be a major cause for concern,” said Chris Williamson, economist in chief at IHS Markit.
“But the July survey also brought new signs that manufacturers and their suppliers are struggling to ramp up production fast enough to meet demand, pushing prices ever higher.”
Widespread material shortages and transportation disruptions pushed the input price sub-index to a record high of 89.2 in July, from 88.5 in June.
“Indicators of capacity constraints continue to flash red. Input shortages worsened further in July at a near-record rate and July saw another near-record increase in backlogs,” said Chris Williamson.
* GERMANY-THE MANUFACTURING SECTOR IS STILL ACCELERATING DESPITE CONSTRAINTS
BERLIN-Accelerated growth in new orders and the labor market boosted the German manufacturing sector in July, with activity picking up again after a slight slowdown in May.
The PMI index measured by IHS Markit among purchasing managers rose to 65.9 in July from 65.1 in June.
July’s figure is the third highest observed since the survey began in 1996.
Strong foreign demand is supporting order books, but shortages of semiconductors and other intermediate goods are hampering production.
“The latest survey results have provided further evidence that production growth is constrained by supply shortages,” commented Trevor Balchin, economist at IHS Markit.
“Supplier delivery times continued to extend significantly in July, although there are signs that supply pressures have peaked, with the incidence of delays being the lowest in five months.”
The sub-indexes measuring input and output prices both rose, with input prices reaching a record high.
“As a result, the rate of producer price inflation reached a new high for the fifth consecutive month,” observed Trevor Balchin.
* FRANCE-LÉGER SLOWDOWN IN THE MANUFACTURING SECTOR
PARIS – Growth in manufacturing activity slowed slightly in July, in part due to supply chain issues and rising raw material costs.
The PMI index measured by IHS Markit among purchasing managers fell to 58 last month from 59 in June and an initial estimate of 58.1.
The index nevertheless remains well above the threshold of 50 which separates a growth from a contraction in activity.
“France is now enjoying a period of growth in production which began in February but the survey raises a number of points on which we must remain cautious,” said Joe Hayes, senior economist at IHS Markit.
“As strong demand drives order books and jobs, companies are currently grappling with rapidly deteriorating supplier performance and intense inflation in input prices,” he explains.
* GB – GROWTH IN THE INDUSTRY SLOWS DOWN, PRICES ARE RISING
LONDON – Activity in Britain’s manufacturing sector slowed again in July amid staff shortages and supply chain tensions, the IHS Markit survey shows.
The sector’s PMI index fell to 60.4, as announced in a first estimate, after 63.9 in June and 65.6 in May.
Growth in production and new contracts fell to their lowest in four months and some manufacturers indicated that their customers had anticipated their purchases to guard against supply problems.
Manufacturers have raised their prices while they are faced with rising input costs such as chemicals, raw materials, cardboard, electronics, metals and even wood.
“As there is growing evidence that supply chain disruptions and commodity shortages are unlikely to be fully resolved until 2022, the outlook remains for limited growth combined with high inflation in the near future, ”said Rob Dobson, director at IHS Markit. (Blandine Hénault, with the European offices of Reuters, edited by)
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