Private Sector Activity Picks Up in The Eurozone, But Loses Momentum Elsewhere

• July 2021’s Purchasing Managers’ Index (PMIs) readings indicate that private sector activity lost further momentum in the US, UK and Japan, but not in the Eurozone.
• Despite remaining high by historical standards, the flash composite PMI for the US and the UK fell for a third consecutive month in July, dropping to 59.7 and 57.7 respectively, from 63.7 and 62.2 in June. Supply constraints (both labour and materials), rising infections and subdued customer demand were reported by US and UK businesses as the main factors weighing on private sector activity. Japan’s flash composite PMI fell further below the 50-mark that separate expansion from contraction, a sign that the economic recovery has lost further traction.
• By contrast, the indicator for the Eurozone rose to its highest level since July 2000, coming in at 60.6, an indication that growth may not have peaked yet although it is expected to in the coming months, especially if the resurgence of COVID-19 cases prompts governments to tighten mobility restrictions to stem the spread of the Delta variant.  

(Source: Fitch Solutions)