Business activity in the eurozone is hovering near a 15-year high despite slightly cooling in August due to supply pressures, a closely-watched survey by IHS Markit showed on Monday.

The PMI Composite reading measuring corporate confidence slipped to 59.5 in August, just under the strong 60.2 figure given in July. A figure above 50 indicates growth.

The dip was explained in part by some business concern over the effects of the Delta variant of the coronavirus, but especially by demand outstripping supply as activity bounced back vigorously in the 19-nation eurozone.

“Supply chain delays continue to wreak havoc,” IHS Markit's chief business economist, Chris Williamson, said.

The duo of surging demand and supply problems was pushing costs higher, he said, leading to “another near-record increase in average selling prices for goods and services”.

Supply chain delays continue to wreak havoc

While that could fuel worries about inflation, Williamson said “inflationary pressures may have peaked for now”.

The survey showed service sector growth overtaking that of manufacturing for the first time in the pandemic recovery.

Jobs growth was at a 21-year peak.

“The sustained upturn in demand and improved prospects due to rising vaccination rates led to buoyant optimism about the year ahead,” IHS Markit said.

Among the eurozone countries, Germany led the survey, though the supply constraints on its vital manufacturing sector was more marked. France was faring less well.

The PMI Composite reading showed further cooling from a June high, with factory output growth slowing to the slowest rate in seven months.