Composite PMI broadly stable at subdued level in May
Leading indicators point to another month of mixed dynamics in the Euro area’s economy. In May, the Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, came in at 51.6 broadly unchanged from April’s 51.5. It marked one of the worst readings in the past five years, but remained just above the 50-point threshold that distinguishes expanding business activity in the Eurozone.
The downturn was partly driven by a lower reading in the Services PMI Activity Index, which hit a four-month low amid soft incoming orders. That said, the index continues to point to growth in the sector, in stark comparison with the manufacturing PMI which is lingering in contractionary territory. The manufacturing PMI also fell in May as firms reported tough conditions with new orders and output dropping again. Meanwhile, expectations of growth remained at multi-year lows in both sectors, pointing to sour confidence.
Regarding the Eurozone’s two largest economies, the PMIs pointed to improved conditions in both Germany and France, however, elsewhere in the region activity softened.