Skip to main content

Eurozone recovery continues as UK growth slows

Eurozone Purchasing Managers’ Index (PMI) data released on 23 July builds on the steady advances of the last few months as the broad economic recovery following lockdowns continues.

23 July 2021

Eurozone Purchasing Managers’ Index (PMI) data released on 23 July builds on the steady advances of the last few months as the broad economic recovery following lockdowns continues. While manufacturing PMI data came in slightly less at 62.6 than the previous month’s reading of 63.4, it was in line with forecasts and still very expansionary. Services data accounted for the broad overall advance, jumping to 60.4 against 58.3 last month. Manufacturing firms continued to point to supply issues that obviously impacted the overall data output. Higher prices due to supply chain issues seem to be being partially passed onto consumers so this will feed through into higher inflation figures in the future, corroborating the European Central Bank’s inflation forecast.

In contrast, the UK manufacturing and services PMI numbers both missed at the headline level versus expectations and showed a slowing from the previous month. Manufacturing at 60.4 fell short of forecasts of 62.3 and the previous month’s reading of 63.9. Services at 57.8 was notably short of forecasts of 62.1 and the previous month’s reading of 62.4. The rise of the Covid-19 Delta variant in the UK and the ‘pingdemic’ might not be fully impacting PMI numbers yet, so it is probable that we could see further declines from here, despite the economy now being out of lockdown. Two steps forward and one step back it seems for the UK economy.

Important legal information
The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.

Charles Hepworth

Investment Director
My Insights

Active Thinking

Fed wary of cutting US rates too quickly

Charles Hepworth

UK services sector continues to expand

Charles Hepworth

UK retail sales bounced back strongly in January

Charles Hepworth

Charles Hepworth Blog