May Flash PMI: Eurozone ex-Germany and France Aid Composite PMI Beat

The Eurozone May services PMI was a touch below consensus at 53.3 (vs 53.6 cons, 53.3 prior), following mixed French and German figures earlier. On the other hand, the stronger-than-expected manufacturing PMI (47.4 vs 46.1 cons, 45.7 prior) was well telegraphed by today’s national releases. The composite output reading was above consensus at 52.3 (vs 52.0 cons, 51.7 prior).

The release notes that the Eurozone ex-Germany and France saw the strongest pace of output expansion in May, consistent with the wider trends in growth seen through 2024.

Key notes from the release:

• “The overall expansion in output was again driven by the service sector, where activity was up for a fourth consecutive month”,
• “The rise in overall new orders was limited by demand weakness in international markets. New export orders decreased for the twenty-seventh successive month, but here too the pace of decline softened and was only modest”.
• “The strongest expansion was again seen in the rest of the eurozone, where output increased at a marked pace that was the fastest since April 2023”.
• “In line with the picture for output and new orders, the rise in staffing levels was centred on the services sector, with manufacturing employment continuing to fall”.
• “The service sector was the principal source of inflationary pressure, with input costs rising rapidly”.
• “A slower increase in services charges was partially offset by a weaker reduction in manufacturing selling prices. Softer output price inflation was seen across Germany, France and the rest of the eurozone”.