Eurozone business growth was strong in May, but it faces the risk of a slowdown in rising cost of living, supply chain disruptions and uncertainty surrounding the Russian invasion of Ukraine.
S&P Global’s composite PMI fell to 54.8 in May from 55.8 in April, marginally lower than initially estimated at 54.9.
“Strong demand for services helped maintain strong economic growth in May, suggesting that the eurozone is expanding its GDP growth rate by just over 0.5%,” said Chris Williamson, chief economist. S&P Global.
“However, the risks are expected to be declining in the coming months. The manufacturing sector remains worryingly constrained by supply disruptions and businesses and households continue to be hit by rising costs,” he added.
The PMI covering the services sector fell to 56.1 points last month from 57.7 points, lower than estimates for 56.3 points.
The industry has been boosted in recent months as most pandemic-related restrictions have been lifted and consumers have returned to a more normal lifestyle.
However, the PMI indicates that this demand is beginning to decline and the new business services index fell to 55 from 56.6 points.
Source: Capital
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