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The delta variant of the coronavirus and manufacturing bottlenecks dented the euro area's reopening boom in August, though the bloc remains on track to reach its pre-pandemic level of output by the end of the year.
While business activity across the region still points to a rapid expansion in the third quarter, momentum slowed slightly from July's 15-year peak, according to a survey of purchasing managers by IHS Markit. Employment continued to rise, even if at a marginally weaker rate, and cost pressures remained high.
“While growth will naturally lose some impetus as the post-lockdown boom peters out, there are a number of other downside factors at play,” said Joe Hayes, senior economist at IHS Markit. “The delta variant has taken hold in Europe, while further material shortages and transport bottlenecks continue to restrain business activity.”
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