The final data published by HCOB showed that activity in the eurozone private sector rose to a 12-month high in May. Stronger demand conditions supported greater output and hiring, while business confidence also improved for the seventh time in the past eight months.
The Eurozone Composite PMI Output Index, which assesses the change in activity in the manufacturing sector and the service sector, rose in May to 52.2 points from 51.7 points in April. Economists had expected an increase to 52.3 points. Meanwhile, services PMI reached 53.2 compared to 53.3 in April and forecasts at 53.3.
The data also showed that of the top-four eurozone economies, France was the outlier in May as a marginal and renewed contraction in private sector activity contrasted with growth in Germany, Spain and Italy. Meanwhile, new orders in the eurozone private sector grew at the fastest pace since April 2023. However, new business received from abroad declined, in line with the trend since March 2022. Confidence in the business outlook for the coming year improved further in May after a slight decline in April. Overall, growth expectations have improved in seven of the past eight months. The level of positive sentiment was the highest since February 2022 and well above the long-term average. The pace of job creation coincided with April and, therefore, became the fastest since June 2023. The service sector was again the driving force behind recruitment in May as factory workforce numbers shrank. As for the inflationary situation, the increase in input costs remained sharp and well above its pre-pandemic average. It was a similar picture for output prices – the rate of inflation in selling charges eased to a six-month low, but remained considerably steeper than that seen on average prior to 2020.