Eurozone private sector growth remained subdued in May as manufacturing contracted further, survey data from IHS Markit showed Thursday.
The composite output index rose marginally to 51.6 in May from 51.5 in April. The score was forecast to rise to 51.7. A reading above 50 indicates expansion.
The weak PMI reading puts growth in the second quarter so far on a par with the lackluster gain seen in the first quarter and was among the lowest recorded since mid-2013, Markit said.
At current levels, the PMI is so far indicating GDP growth of only 0.2 percent in the second quarter, Chris Williamson, chief business economist at IHS Markit, said.
In the latest Economic Outlook, the Organization for Economic Co-operation and Development forecast the euro area to grow 1.2 percent this year and 1.4 percent next year.
The think tank renewed its calls for combining structural reforms in all euro area countries with additional public investment in low-debt European countries.
The IHS Markit survey showed that after rising to a five-month high in April, growth of new business waned again, and new export orders declined markedly.
Jobs growth slipped to the joint-lowest since September 2016 as firms scaled back expansion plans in the light of weak sales.
Moreover, optimism about the future slumped to a four-and-a-half year low and inflationary pressures moderated as competition limited sellers’ pricing power.
The manufacturing Purchasing Managers’ Index slid to 47.7 from 47.9 in April. The score was forecast to rise to 48.1.
The services PMI fell to 52.5 from 52.8 in the previous month. Economists had forecast a score of 53.0.
Only national data for France and Germany are published. Growth edged higher in Germany, thanks to sustained service sector growth and an easing in the rate of decline of manufacturing output.
Germany’s composite output index rose unexpectedly to a three-month high of 52.4 in May from 52.2 in April. The score was also above the expected level of 52.0.
The manufacturing PMI fell unexpectedly to 44.3 from 44.4 in April. The expected score was 44.8.
At the same time, the services PMI dropped to a 4-month low of 55.0 from 55.7 in the previous month. The reading was forecast to fall moderately to 55.4.
Elsewhere, France’s private sector activity expanded at the fastest pace in six months in May.
France’s flash composite output index rose more-than-expected to 51.3 in May from 50.1 in April. The score was forecast to rise to 50.3.
The services PMI climbed to 51.7 from 50.5 in the previous month. The expected reading was 50.8. The manufacturing PMI came in at 50.6 in May, up from 50.0 in April but below the forecast of 50.8.
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