Eurozone Private Sector Expands For Fifth Month

(RTTNews) - Euro area private sector expanded for the fifth straight month in May, but the upturn was only fractional and the slowest in three months, final results of the purchasing managers' survey by S&P Global showed on Wednesday.

The final HCOB composite output index fell to 50.2 in May from 50.4 in April. However, the score was above the threshold 50-mark and also the flash estimate of 49.5.

The survey showed that manufacturing was the primary engine for growth as services activity contracted for the first time since last November.

The HCOB services Purchasing Managers' Index dropped to 49.7 in May from 50.1 in April. Nonetheless, the PMI reading was above the flash estimate of 48.9.

New business intakes extended its decline that began in June 2024. New work from non-domestic customers declined for the thirty-ninth successive month.

Companies made additional inroads to backlogged orders to compensate for lower volumes of incoming new work. Employment across the private sector increased but only fractionally.

There was a pick-up in business confidence for the first time since January. Stronger confidence was registered at both manufacturers and service providers.

Regarding prices, the PMI survey revealed that input costs grew at the weakest pace in six months, and selling prices grew only moderately and at the slowest pace since last October.

The major four economies of the currency bloc diverged in their performance. While Italy and Spain registered growth in private sector output, France moved closer to stabilization and Germany reported the first decline in five months.

"If the southern European countries can maintain their momentum to some extent, while German service providers begin to benefit from expansionary fiscal policy, a recovery in this sector is quite possible this year," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

Germany's private sector slipped back into contraction in May. The final composite output index posted 48.5 in May compared to 50.1 in April. The flash reading was 48.6.

The final services PMI dropped to 47.1 in May from 49.0 in the previous month. The flash score was 47.2.

France's private sector came closer to stabilization in May and registered its slowest fall in the nine-month period of contraction. The final composite output index rose to 49.3 in May from 47.8 in the previous month. The flash score was 48.0.

The final services PMI advanced to 48.9 from 47.3 in April. The reading was initially estimated at 47.4.

Italy's private sector growth hit a 13-month high in May. The composite output index rose to 52.5 from 52.1 in April. This was the fourth consecutive month of growth.

The services PMI registered 53.2 in May compared to 52.9 in the prior month. The reading marked the sixth successive monthly growth and also signaled the fastest expansion in nearly a year. Spain's private sector economy continued to expand in May but the pace of growth eased to the weakest since December 2023. The composite index fell to 51.4 from 52.5 in April.

Both manufacturers and service providers signaled moderate rises in output. The services PMI recorded 51.3 in May compared to April's 53.4.