Eurozone Business Growth Slows in May as Manufacturing Contracts

Business growth in the Euro zone continued to be resilient but slowed more than estimated in May, a survey showed on Tuesday, as the service sector shed part of its momentum, while a slowdown in the manufacturing sector worsened.

A key indicator of economic growth, the flash Composite Purchasing Managers’ Index (PMI) for the Euro zone, calculated by S&P Global, dipped to 53.3 in May from 54.1 in April.

Although it was well above the 50 threshold separating expansion from contraction, it fell short of the 53.5 projected in a Reuters poll.

According to analysts, the PMI findings for the Euro zone in 2Q23 show a healthy GDP gain, although indicating a slower pace of expansion in May. However, the forward-looking indicators have limited optimism, revealing that new orders growth nearly stalled in May and confidence fell to a five-month low.