PMI falls to year-and-a-half low in May
Leading data suggests that the Euro area’s economic momentum weakened in May. The preliminary Eurozone Composite Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 55.1 in April to 54.1 in May, continuing the downward trend seen since January. The result marked an 18-month low and undershot expectation of a softer dip to 54.8. Despite the fall, the composite PMI lies well above the 50-threshold, signaling expanding business activity in the Eurozone.
Overall the survey data was downbeat. New orders, output and hiring all lost steam in May, and firms also became less optimistic. Conditions deteriorated in both the manufacturing and services sector, with both PMIs falling to over one-year lows. Firms reported that activity was disrupted by a higher than usual number of public holidays, which likely affected the headline result. On the price front, input cost inflation rose to a three-month high in May, while average selling prices rose at the softest pace since September 2017.
Regarding the two largest Eurozone economies, the composite PMIs fell notably in France and Germany, but rose elsewhere in the region.