8/5/2023 0 Comments Pent up![]() ![]() Recently, the services sub-indices have shown most promise. Inventories are also low, and with input prices rising, companies have been forced to raise their own prices to ration demand. ![]() Strong domestic and especially rampant export orders have helped lift output, but firms are reporting supply constraints and a growing backlog of unfulfilled orders. The aggregate eurozone PMI is at its highest level since February 2000. Despite only a partial unlocking, activity indicators, such as the macro composite purchasing managers indices (PMIs) have soared (chart 3). Given the precipitous fall in activity last year, we always expected a sharp rebound once restrictions were lifted. It may even be possible to allow more travel than previously thought, which would be incredibly helpful for the tourism industry, and those countries in the south of Europe that benefit most from visitors. It may yet be another week or two before we would expect to see another rise in cases.īut, the evidence so far has been promising, and it should encourage countries with high vaccination rates to continue to lift restrictions. It is still too soon to claim victory against the virus, especially as the UK only recently lifted all legal restrictions. ![]() Moreover, deaths were about 13 times higher than they have been recently, highlighting the success of the vaccines programme, even against the new variant which has become the dominant strain. Interestingly though, hospitalisations due to Covid-19 were just over a quarter of the level seen at the start of January this year, which is the comparable period when looking at the level of cases. The number of daily new confirmed cases peaked at 47,695 (using a 7-day moving average) on 21 July, and have fallen by 31% since. The good news is that evidence from the UK so far suggests that current vaccines are still very effective against the Delta variant. The new variant has yet to really take hold in mainland Europe in any great numbers, but if it does, then it is likely to spread far faster than its current prevalent form. However, concerns remain over the so-called Delta variant, which has caused another spike up in the UK and Spain. Vaccinations and lockdowns have clearly been effective. In general, confirmed coronavirus cases are significantly lower than where they were at the start of the year. Spain, Italy and Germany now have more than half of their populations fully vaccinated, with France lagging a little behind at about 45%. The big four eurozone member states overtook the UK and US in terms of the number of daily vaccinations in late May, and have since managed to close the gap with respect to the share of the population that have been either fully or partially vaccinated (chart 1). This has only been possible with thanks to the tremendous acceleration in vaccination efforts. Delayed from last year, the tournament has been able to take place across the continent, though only with strict testing and isolation regimes, and a limited number of live spectators allowed for each game. The European Championship football tournament is a great example of this. Restrictions on contact services that limit or prohibit certain activities remain, but the slow return to some normality is welcomed by all. The eurozone is emerging from its second recession since the start of the pandemic as businesses slowly reopen. ![]()
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