Eurozone private activity revised higher, but growth still subdued
By Benjamin Chiou
Date: Wednesday 04 Jun 2025
(Sharecast News) - A closely followed gauge of private-sector business conditions across the eurozone was revised higher on Wednesday, meaning economic activity narrowly avoided stagnating in May.
Final estimates for the S&P Global/Hamburg Commercial Bank's composite purchasing managers' index (PMI) for the single-currency region came in at 50.2 in May, down from 50.4 in April but above the flash reading of 49.5 released two weeks ago.
A reading below 50 signals a decrease in activity, and this would have been the first contraction for the eurozone private sector so far this year.
The upgrade was mainly a result of a slower-than-expected decline in the eurozone services sector, with the non-manufacturing PMI revised up to 49.7 from 48.9. Nevertheless, this was down from 50.1 in April and the first contraction since November.
Keeping a lid on growth was another decrease in new business intakes, extending a period of falling sales that started in June 2024.
"There was no support from export markets, with the latest survey data signalling a 39th successive reduction in new work received from non-domestic customers," the PMI said.
On the upside, May's data showed a pick-up in business confidence for the first time since January - though optimism remained weka by historical standards.
"The eurozone economy has grown for the fifth month in a row, but this interpretation requires a certain amount of goodwill, as the overall index of 50.2 is only marginally above the expansion threshold and the pace of growth also slowed slightly in May," said Cyrus de la Rubia, chief economist at HCOB.
"For the rest of the year, we are confident that further key interest rate cuts by the European Central Bank and fiscal stimulus, particularly from Germany, will be sufficient to offset the negative effects of higher tariffs and increased uncertainty."
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