LONDON (Reuters) – Growth in euro zone business activity slowed slightly more than expected in May as the services sector lost some momentum and the contraction in manufacturing worsened. .

According to a preliminary estimate published on Tuesday, the composite PMI index, which combines the manufacturing and services sectors, fell this month to 53.3 from 54.1 in April. It appears below the forecasts of economists polled by Reuters, who expected 53.5.

“The PMI data suggests an expansion of euro zone GDP, driven by the good performance of the services sector. The weakness of the manufacturing sector, in Germany in particular, is however seriously hampering economic growth in the region,” said Cyrus of the Rubia, chief economist at Hamburg Commercial Bank.

With inflation and rising interest rates, the new orders index fell from 52.5 to 50.4.

The PMI for the services sector alone fell to 55.9 in May from 56.2 in April and 55.6 expected.

Despite a slowdown in new business growth, service companies have increased their workforces at a steady pace. The employment index is 55.0.

The PMI for the manufacturing sector fell this month to 44.6, its lowest level since May 2020, after 45.8 in April and a forecast of 46.0.

An index measuring manufacturing output fell from 46.3 to 48.5, a six-month low.

The restoration of supply chains and lower energy costs have allowed a further drop in prices paid.

(Jonathan Cable, Laetitia Volga, editing by Kate Entringer)

Copyright © 2023 Thomson Reuters