Euro area private sector activity grew at the fastest pace in a year in May, driven by strong new orders, employment gains and an improving economic climate. work According to preliminary survey data released Thursday by S&P Global,
The preliminary composite production index rose to 52.3 in May from 51.7 in the previous month. The score also beat economists' expectations of a 52.0 reading.
The score suggests activity growth accelerated for the second month in a row, marking the fastest expansion in a year. The overall expansion was led by the services sector, but the pace of growth has remained unchanged since April.
The services purchasing managers' index was stable at 53.3 in May, below the forecast of 53.6.
Manufacturing activity remained in negative territory for the 14th consecutive month, but the PMI rose to a 15-month high of 47.4 from 45.7 in the previous month. The score is estimated at 46.2.
Growth in new orders in May was generally stronger due to solid expansion in the services sector, with the rate of increase reaching a 13-month high. On the other hand, new orders in the manufacturing industry continued to decline.
Employment increased at the fastest pace since June last year, in line with the increase in new orders. Depending on production and new orders, the increase in staffing was mainly in the service sector.
Companies continued to reduce purchasing activities. Inventories of both purchased and finished goods decreased, and supplier delivery times continued to shorten.
On the price front, the survey found that both input and output price inflation eased in May, although both remained above their pre-pandemic averages.
Businesses expressed more optimism about future business activity, with confidence hitting its highest level since February 2022.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said that given the PMI figures, apart from recession concerns, the euro area could achieve growth of 0.3% in the second quarter. said that it was high.
Of the currency bloc's two largest economies, Germany's private sector grew the most over the year, while France fell into contraction territory.
Germany's private sector expanded at the fastest pace in a year in May, driven by strengthening services activity. The flash HCOB composite production index rose more than expected to 52.2 in May from 50.6 in April. The expected score was 51.0.
Growth continued to be driven by the services sector. Moreover, the traction from the manufacturing sector eased significantly in the middle of the second quarter, the survey showed.
The services PMI rose from 53.2 in April to an 11-month high of 53.9, beating economists' expectations of 53.5.
At the same time, the manufacturing PMI rose to 45.4 from 42.5 in the previous month. The reading was 43.4.
France's private sector unexpectedly contracted in May after returning to growth the previous month. The main HCOB Comprehensive Production Index fell to 49.1 in May from 50.5 in April. This figure was expected to rise to 51.0.
The services PMI came in at 49.4 in May, down from 51.3 in April and economists' expectations of 51.8.
Meanwhile, the manufacturing PMI rose to 46.7, the highest in three months, from 45.3 in February and beating the forecast of 45.8.
By Renju Jaya
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