BRUSSELS: Business growth across the eurozone dipped to a 16-month low in May, but stronger showings from Germany and France suggest it is the smaller member countries that might be struggling.
Offering the latest evidence that a strong acceleration in growth in the first three months of the year was only temporary, Markit’s flash Composite Purchasing Managers’ Index edged down to 52.9 from April’s 53.
While essentially stable — and still indicating growth — the reading was the lowest since the start of last year. It ran against expectations in a Reuters poll, which had predicted a tick up to 53.2 in one of the earliest reported broad indicators of growth during the month.
Markit said the PMI pointed to quarterly GDP growth of 0.3 percent, in line with forecasts in a Reuters survey published earlier this month, but short of 0.5 percent in the first quarter, which was initially reported as 0.6 percent.
Individually, polls showed growth in Germany’s private sector accelerated to their fastest rate this year. French business activity also grew faster than expected, returning to a rate not recorded since before the November 13 attacks in Paris.
“That suggests the PMIs for the other major eurozone economies … will be soft when released next week,” said Stephen Brown at Capital Economics.
Germany and France are the only individual eurozone countries for which Markit publishes flash PMIs. May surveys for other eurozone members will be published early next month.
Despite evidence of a slowdown, consumer confidence in the currency bloc rose for a second month in May, to its highest level since January.
