European Factories Hire at Fastest Pace in a Quarter Century
European factories are recruiting staff at the fastest pace in at least 24 years as they try to meet surging demand.
Manufacturers reported the hiring boom in surveys by IHS Markit published Thursday, which showed output in the euro zone and U.K. rising at or near the fastest pace since the data started being collected. Austria and the Netherlands led the employment growth.
Factories are benefiting from Europe’s economic rebound, as vaccinations allow shops, restaurants and leisure facilities to reopen. But they’re also struggling with supply shortages that are forcing them to run down stockpiles.
In response, they’re taking on additional workers and stepping up investment to boost output, IHS Markit said, aided by their ability to raise own selling prices. A separate report Thursday showed euro-area unemployment dropped to 7.9% in May.
While the cost increases are currently flowing though to consumer prices -- raising concern among some central bankers and economists -- the hiring spree and the build-up of capacity should alleviate those pressures.
“This expansion should raise output in sectors that are currently straining to meet demand and hence remove some of the upward pressure on prices for these goods,” said Chris Williamson, chief business economist at IHS Markit.
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