LONDON, (Reuters) – Although manufacturing in the Euro zone remained steady in September and activity suffered from supply chain bottlenecks which are expected to last and continue keeping inflationary pressures high. A survey was conducted on Friday.

Factories are facing logistical challenges, shortages of products and labour problems as a result of the ongoing coronavirus outbreak. Governments were forced to restrict mobility.

IHS Markit’s last manufacturing Purchasing Managements’ Index (PMI), dropped to 58.6 in September, from August’s 61.4. This is just below the initial flash of 58.7.

A composite PMI, an index that measures output and feeds into it, is due to be released on Tuesday. It was August’s 59.5, but has dropped to 55.6. Any value above 50 is considered growth.

Chris Williamson (chief business economist, IHS Markit) stated that “while eurozone manufacturing expanded at an impressive pace in September,” but growth has declined markedly since producers are reporting a growing toll due to supply chain headwinds.

“Supply problems continue to wreck havoc across large areas of European manufacturing. With delays and shortages reported at rates never seen in nearly a quarter century, and with no sign of improvement imminent,”

The cost of the raw material factories use was strained by these bottlenecks. From August’s 87.0, the index of input prices fell to 86.9.

However, some factories transferred the increases to their customers so that the output price index surpassed its record-breaking high in the summer.

The euro area’s inflation rate likely rose to 3.3% in October, according to preliminary data. This is well beyond the target of 2.0% set by the European Central Bank.

It announced that the ECB would reduce emergency bond purchases despite inflation rising. The move was a step in the right direction towards removing the assistance that helped to prop up the country’s economy through the coronavirus pandemic.