Eurozone manufacturing booms, brings price inflation

The eurozone's manufacturing sector expanded at a record rate in March, but supply-chain delays drove the sharpest rise in input costs for 10 years.

The IHS Markit Manufacturing Purchasing Managers' Index (PMI) reading was 62.5 last month, up from 57.9 in February and the greatest month-on-month improvement in nearly 24 years. All countries in the survey recorded readings above the level of 50 that indicates expansion, with all-time highs in Germany and the Netherlands and more than 20-year peaks in Italy and France.

Manufacturers enjoyed record rises in output and new orders in March, and were able to raise their average prices by the most since April 2011 as supply chains were strained by shortages and logistical challenges. This will probably continue into April and may be exacerbated by delays arising from the Suez Canal blockage, IHS Markit said.

Its chief economist Chris Williamson said industry expectations of growth in the year ahead are also running at record highs, leading to investment and restocking as firms prepare for the possibility of still stronger post-pandemic demand.

By Ben Winkley