The pace of eurozone economic growth remained subdued in May amid stagnant demand.
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Jobs growth slipped to the joint-lowest since 2016 as firms scaled back expansion plans in the light of weak sales.
Optimism about the future meanwhile slumped to a four-and-a-half year low and inflationary pressures moderated as competition limited sellers’ pricing power.
The IHS Markit Eurozone Composite PMI recorded 51.6 in May, according to the preliminary ‘flash’ estimate, up only fractionally from 51.5 in April.
The weak reading puts growth in the second quarter so far on a par with the lacklustre gain seen in the first quarter and is among the lowest recorded since mid-2013.
After rising to a modest five-month high in April, growth of new business waned again in May to show only the smallest of increases.
New export* orders fell markedly again, down for an eighth successive month, though the decline was less steep than in the prior two months.
The lack of new business meant backlogs of work fell for the fifth time in the past six months, reflecting the near-absence of new business growth and indicative of spare capacity developing.
Manufacturing once again reported the tougher conditions, with output down for a fourth straight month and new orders falling for an eighth month, led by a further steep drop in goods exports.
However, rates of decline of output, new orders and exports all eased for a second successive month.
The service sector continued to grow, but the rate of expansion was the weakest since January amid sluggish growth of new work.
With the exception of the soft patch seen at the turn of the year, new business inflows were the lowest since 2014.
Looking ahead, companies reined-in their expectations of growth in the coming year to the lowest since October 2014.
Expectations hit the lowest since 2014 in services and remained among the weakest since 2012 in manufacturing, despite lifting higher for a second month running.
With new orders near-stagnant and optimism deteriorating, companies pulled back on hiring, resulting in the joint-smallest gain in employment since September 2016.
Manufacturing jobs fell for the first time since August 2014, lost at the fastest rate since November 2013.
By comparison, service providers remained more confident to hire, yet the net rise in jobs cooled from April’s six-month high. ■