Business activity in Europe surged in May as the easing of pandemic restrictions injected life into the services industry and factory output had its best month on record.
An acceleration of vaccines across Europe and a drop in daily cases has allowed governments to remove some measures imposed to stop the spread of COVID-19. As a result, IHS Markit's Purchasing Managers' Index (PMI), viewed as a gauge of economic health, jumped to 57.1 in May, its highest level since February 2018.
May's reading was comfortably above the 50 mark that separates economic growth from contraction. An index covering the service industry soared to a three-year high of 55.2 from 50.5 in April.
Germany’s services industry returned to growth in May, boosted by falling COVID-19 infections and a loosening of restrictions, lifting overall private sector output in Europe's largest economy.
French business activity also surged as an easing of lockdown measures fired up the service industry while in Spain the service sector expanded at its fastest pace since 2015.
In Britain, which is now outside the European Union, the services sector recorded the biggest jump in activity in 24 years after pubs and restaurants were allowed to resume serving customers indoors following months of lockdowns.
Alongside the recovery in services, Europe’s manufacturing activity expanded at a record pace in May.
Following a slow start, vaccination drives across Europe have picked up pace and with restrictions being eased, optimism about the year ahead has increased. The services business expectations index rose to 71.2 in May from 68.4, its highest level since January 2004.
