Eurozone manufacturing PMI reaches lowest level in 36 months

By Ed Frankl

Business activity in the eurozone moderated in May, still showing output grew for a fifth straight month, though with new business inflows nearly stalling and a struggling manufacturing sector, the outlook has become bleaker, data from a purchasing managers survey showed Tuesday.

The HCOB Flash Eurozone Composite PMI Output Index–which gauges activity in the manufacturing and services sectors–fell to a three-month low of 53.3 in May, from a downwardly revised 54.1 in April.

However, the indicator, compiled by S&P Global, suggests private-sector activity in the eurozone continued to expand in May as it came in above the 50 no-change threshold.

The reading slightly missed expectations of economists polled by The Wall Street Journal, who expected the PMI to come in at 53.5.

“Eurozone GDP is likely to have grown in the second quarter thanks to the healthy state of the services sector. However, the manufacturing sector is a powerful drag on the momentum of the economy as a whole,” Hamburg Commercial Bank’s Chief Economist Cyrus de la Rubia said.

Strong services-sector growth contrasted with a steepening loss of factory output, according to the report. While the services sector PMI dipped slightly to make its lowest reading in two months, the manufacturing PMI continued to struggle, hitting a 36-month low in May.

New orders rose only marginally, at the slowest rate for four months, suggesting demand has stalled, the survey said.

Meanwhile, business confidence in the eurozone tumbled to a five-month low, as concerns grow about the bloc’s economic outlook, which remain especially weak in the manufacturing sector. Economists expect sluggish growth in the euro area of 0.2% in the second quarter, amid high inflation and rising interest rates, according to economists polled by FactSet.

Write to Ed Frankl at

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