03.06.202608:29:57UTC+00Euro Area Private Sector Activity in Contraction for 2nd Month

The S&P Global Eurozone Composite PMI for May 2026 was revised up to 48.5 from a preliminary estimate of 47.5, but remained below April’s reading of 48.8. This indicates the sharpest decline in private sector activity in 18 months as inflation continues to weigh on the economy. It also marks the first instance of consecutive monthly contractions since the end of 2024.

Overall activity was dragged down by the services sector, where the PMI edged up only slightly to 47.7 from 47.6, signaling a continued contraction. In contrast, manufacturing remained in expansion territory, though growth slowed, with the PMI easing to 51.6 from 52.2.

Output was pressured by a further drop in demand for euro area goods and services, with export markets a particular weak spot. New orders from abroad fell at the fastest pace in five months. Signs of softening were also visible in the labor market, as job losses increased.

On the pricing front, input cost pressures stayed at their highest levels since late 2022. For the third consecutive month, the pace of output price inflation accelerated. Nonetheless, business sentiment showed a modest improvement, pointing to a slight recovery in confidence.