The contraction in activity has slowed its pace in the euro area in May, although the lack of new orders could indicate that the area's economy risks contracting again in the second quarter. The SME surveys of companies by Markit say so.
The PMI flash estimate for the services sector - which includes about 2.000 companies ranging from large banks to restaurants - rose to 47,5 in May (the highest value in the last three months), from 47,0 in April. The value is above the consensus of 47,2, even if it remains below the threshold of 50 which separates contraction from expansion for 16 consecutive months. The sub-index of new orders in this sector is at 45,3, down further from 46,2 in April.
For the manufacturing sector, the flash estimate it is 47,8 – also in this case at a three-month high – from 46,7 in April and above the consensus of 47,0. In this sector, the production sub-index was at 48,2, a 4-month high – up from 46,5 in April, with new orders at 47,9 – a three-month high – from 45,4 in April.
Eurozone composite PMI - which combines the tertiary and manufacturing sectors - stood at 47,7 for May (three-month high) from 46,9 in April, above the consensus of 47,2. In this context, the sub-index relating to employment is at 47,3 unchanged from April, the minimum of three months.
