LONDON, (Reuters) – Although manufacturing growth was slightly higher in the Euro zone last month, supply chain bottlenecks grew, limiting output and pushing up the price of raw materials at their highest rate for over 20 years, a survey revealed.

The coronavirus pandemic and shortages of drivers for heavy vehicles have caused product disruptions that left factories struggling with materials to produce goods.

IHS Markit’s last manufacturing Purchasing Managements’ Index (PMI), rose slightly to 58.4 in October from October’s low of 58.3, but was still above the 50-mark that distinguishes between growth and contraction.

The output index, which feeds into the composite PMI due Friday, rose to 53.8, from 53.3 in October.

A strong headline PMI reading doesn’t show how difficult business is for manufacturers right now. “While demand continues to be strong, as demonstrated by the solid increase in new order flows, supply chains are continuing to deteriorate at an alarming pace,” stated Chris Williamson chief business economist at IHS Markit.

These disruptions make it a buyers’ market for raw materials, and the input price index fell to just under October’s all-time high.

However, factories transferred more of these rising costs to their customers and raised prices at the fastest rate since IHS Markit started collecting data almost 19 years ago. Output prices rose to 73.7, a survey record. It was 72.6 before.

That suggests overall inflation https://www.reuters.com/world/europe/euro-zone-inflation-hits-record-high-likely-peak-2021-11-30 in the bloc, which preliminary official data showed on Tuesday was a record high 4.9% last month, will continue to overshoot the European Central Bank’s 2.0% target.

The ECB has been undermining its inflation targets for almost a decade due to rising inflation and a rise in home prices. It is now under pressure to take action.

The ECB is forecast to keep its key interest rates on hold through to end-2023 at least, a November Reuters poll https://www.reuters.com/business/euro-zone-inflation-remain-above-ecbs-target-next-year-2021-11-12 found.