LONDON, May 5 Reuters Euro zone business activity accelerated last month as the blocs dominant services industry shrugged off renewed lockdowns and returned to growth, according to a survey on Wednesday that also showed firms were facing soaring costs for raw materials.

Europe is enduring a third wave of coronavirus infections, forcing some governments to renew lockdown measures to contain its spread, but factories have largely remained open and the services industry has adapted.

So IHS Markits final composite Purchasing Managers Index PMI, seen as a good gauge of economic health, climbed to 53.8 last month from Marchs 53.2. That was just ahead of the preliminary 53.7 reading and comfortably above the 50 mark separating growth from contraction.

The blocs economy is set to grow 1.5 this quarter, a Reuters poll found last month.

Aprils survey data provide encouraging evidence that the euro zone will pull out of its doubledip recession in the second quarter, said Chris Williamson, chief business economist at IHS Markit.

A manufacturing boom, fuelled by surging demand both in domestic and export markets as many economies emerge from lockdowns, is being accompanied by signs that the service sector has now also returned to growth.

A PMI for the service industry rose to 50.5 from 49.6, pipping the flash 50.3 estimate. That followed a manufacturing PMI on Monday that showed factory activity growth surged to a record high in April.

But supply chain disruptions caused by…