At the global level, the recovery momentum remains solid amid continued supply constraints. The Purchasing Managers' Index data for June show historically high levels for the second quarter of 2021 as a whole. At the same time, the growth momentum slowed somewhat in June because activity normalised to some extent in several key economies. Trade in goods remains robust despite increasing headwinds from supply bottlenecks. With respect to global inflation developments, price pressures increased further, driven largely by transitory factors such as base effects and pandemic-related supply constraints. Looking ahead, pandemic developments continue to be a source of uncertainty for the global economic recovery and may lead to an increasingly uneven growth path across countries.
The euro area economy rebounded in the second quarter of the year and, as restrictions are eased, is on track for strong growth in the third quarter. More and more people are getting vaccinated, and lockdown restrictions have been eased in most euro area countries. Manufacturing is expected to perform strongly, even though supply bottlenecks are holding back production in the near term. The reopening of large parts of the economy is supporting a vigorous bounce-back in the services sector. But the Delta variant of the coronavirus (COVID-19) could dampen this recovery in services, especially in tourism and hospitality.
As people return to shops and restaurants and resume travelling, consumer spending is rising. Better job prospects, increasing confidence and continued government support are reinforcing spending. The ongoing recovery in domestic and global demand is boosting optimism among businesses, which supports investment. For the first time since the start of the pandemic, the euro area bank lending survey indicates that funding of fixed investment is an important factor driving the demand for loans to firms.
Economic activity is expected to return to its pre-crisis level in the first quarter of next year. But there is still a long way to go before the damage to the economy caused by the pandemic is offset. The number of people in job retention schemes has been declining but remains high. Overall, there are still 3.3 million fewer people employed than before the pandemic, especially among the younger and lower skilled. Significant policy support remains essential. An ambitious and coordinated fiscal policy should continue to complement monetary policy in underpinning confidence and supporting spending. The Next Generation EU programme is also playing a key role, as it should contribute to a stronger and more uniform recovery across the euro area.
