Eurozone growth slips to one-and-a-half year low in May
Staff Writer |
Flash PMI survey data showed business activity and new order growth slowing in May, with hiring and backlogs of work likewise exhibiting slower rates of increase.
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The survey also indicated that companies have become less optimistic about the outlook.
There was mixed news on price trends, as cost pressures increased but selling price inflation slowed.
The IHS Markit Eurozone PMI fell from 55.1 in April to 54.1 in May, according to the flash reading which is based on approximately 85% of usual replies.
By remaining well above the 50 no-change mark, the PMI continued to signal robust growth of business activity in the euro area.
However, the latest increase was the weakest for one-and-a-half years, the rate of expansion having cooled for a fourth successive month.
Growth deteriorated in both manufacturing and services, down to 18- and 16-month lows respectively.
Inflows of new business likewise grew at a reduced pace, the rate of increase waning for a fifth successive month to reach the lowest since October 2016.
Nineteen-month lows were seen in terms of both manufacturing and service sector new business growth.
Reduced new order inflows in the goods-producing sector were linked in part to weaker export* growth, which registered the smallest rise since August 2016.
While the surveys from February through to April had seen widespread cases of business activity being disturbed by temporary factors such as bad weather, strikes, illness and the timing of Easter, the May survey saw frequent reports of business being disrupted by a higher than usual number of public holidays, which workers often bridged on to weekends.
The surveys nonetheless continued to provide anecdotal evidence of business being constrained by shortages of both raw materials and labour in some countries.
Such constraints were also indicated by a further marked lengthening of supplier delivery times and rising backlogs of work.
However, the extent of such constraints showed further signs of easing. ■