The increase in sentiment from 117.9 to 119 in July was better than expected and confirms the view of a strong rebound in economic activity. The reopening of economies is boosting service sector activity, and manufacturing continues to perform strongly. The two main risks to the outlook are the increasing impact from supply chain problems in manufacturing and the surge of the Delta variant for services. The ESI did provide some colour on these two risks.

Order books continue to fill rapidly for industry, while the stock of finished products is falling rapidly. Production expectations are falling slightly, which indicates that worries among businesses about whether production can keep up with demand are increasing a little. The outlook remains bright for manufacturing given the order inflow, but production is set to be more spread out as shortages are causing production hiccups.

The Delta variant caused consumer…

Read more…

Share.

Comments are closed.