BRUSSELS (dpa-AFX) - The euro area private sector registered a renewed contraction in April as the war in the Middle East took its toll on business activity, flash survey data from S&P Global showed Thursday.
The flash composite output index logged 47.5 in May, down from 48.8 in the previous month. The score was expected to remain stable at 48.8.
The score signaled a sharp monthly reduction in activity and one that was the sharpest since October 2023.
'The survey data indicate that the euro area economy looks set to contract by 0.2% in the second quarter,' S&P Global Market Intelligence Chief Business Economist Chris Williamson said.
The overall contraction in Eurozone output was centered on the service sector, where activity decreased at the fastest pace since February 2021. Meanwhile, manufacturing production continued to grow slightly.
The services Purchasing Managers' Index dropped to 46.4 from 47.6 in the prior month, while the score was forecast to rise to 47.8.
At the same time, the flash manufacturing PMI declined to 51.4 from 52.2 in April. The index remained below forecast of 51.7.
There were sharper falls in output, new orders and employment in May. A key reason for the fall in business activity was intensification of cost pressures.
Input price inflation hit a three-and-a-half year high in May and average prices charged for goods and services increased at the sharpest pace in 38 months.
Business confidence weakened to a 32-month low as sentiment among service providers hit the lowest level since September 2022.
French firms reported a particularly marked reduction in output in May, while business activity also decreased in Germany and in the rest of the eurozone as a whole, the survey showed.
Germany's private sector contracted in May amid a backdrop of weakening demand and high inflationary pressures. The flash composite output index fell to 48.6 in May from 48.4 in April.
The flash services PMI logged 47.8 in May, up from 46.9 in the previous month. The score was forecast to rise to 47.1.
The manufacturing PMI declined to a four-month low of 49.9 in May from 51.4 in April. The expected score was 51.0.
France's private sector contracted at the sharpest pace in five-and-a-half years in May. The flash composite output index dropped to 43.5 in May from 47.6 in the prior month. This was the lowest score since November 2020.
The survey showed an accelerated decline in services activity accompanied by a fresh fall in manufacturing output. The services PMI dropped unexpectedly to 42.9 from 46.5 in the prior month. The score was seen at 46.6.
The manufacturing PMI posted 48.9 compared to 52.8 in the prior month. The reading was expected to fall moderately to 52.1.
Copyright(c) 2026 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2026 AFX News
