IHS Markit Index: Eurozone Manufacturing Growth Hit by Supply Shortages

A survey revealed that the growth of the manufacturing sector in the euro area remained strong in August, but supply chain problems related to the Covid-19 pandemic continued to impede the supply of raw materials needed by factories, which led to higher prices.

The easing of restrictions imposed to curb the spread of the Coronavirus has boosted demand, but many companies have announced that they are facing logistical problems, a production deficit, and a shortage of labor.

The final reading of the IHS Markit Manufacturing Purchasing Managers’ Index fell to 61.4 in August, compared to 62.8 in July and below a preliminary estimate of 61.5.

An index measuring production, feeding into a composite Purchasing Managers’ Index due on Friday and considered a good gauge of the economy’s health, fell from 61.1 in July to 59.0. Any reading above the 50 levels indicates growth.