Eurozone Business Climate Resilient Amid Rising Inflation

The Eurozone's business climate remains resilient despite rising inflation, but consumer confidence has taken a hit. According to recent PMIs, the manufacturing sector has been in expansion territory for eight consecutive months, while services have seen a clear improvement.

However, consumer confidence has recorded its first decline in five months due to concerns over purchasing power and rising inflation. Inflation measures show that prices are increasing at a rate of 3.8% year-on-year, with energy costs contributing 0.4 percentage points to this figure.

The input and output prices components of the composite PMI also indicate direct inflationary pressures. The suppliers' delivery times component suggests possible supply difficulties and an indirect impact on inflation.