The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index dropped to 49.5 in May from 50.4 in April, below the 50.0 no-change mark for the first time in five months and thereby signaling a reduction in private sector output midway through the second quarter of the year. That said, the pace of contraction was only marginal.
Provisional PMI survey data pointed to a renewed fall in Eurozone business activity during May as new orders continued to decrease. The reduction in output was centered on the services sector as manufacturing production rose modestly.
A short period of employment growth also came to an end midway through the second quarter, with staffing levels kept stable in May.
Meanwhile, business confidence moderated further, easing to a 19-month low. On the price front, rates of inflation of both input costs and output prices softened, although this masked differing trends at the sector level.
Input costs and selling prices fell in manufacturing, with inflation limited to service providers. While the overall fall in output in May followed a period of growth, new orders have now decreased on a monthly basis throughout the past year.
After having dropped sharply in April, business confidence ticked down again in May and was the lowest since October 2023. Sentiment was also weaker than the series average.