Eurozone economy hit as private sector slips into recession
According to preliminary data from S&P Global, declining demand and renewed pessimism have pressured the eurozone’s service sector, dragging overall economic momentum to a six-month low. The Composite Purchasing Managers’ Index (PMI) for the eurozone fell to 49.5 in May—below economists’ forecast of 50.7—marking the first contraction since November 2024. A PMI reading below 50 indicates economic contraction.
The services sector drove this decline,with business activity shrinking at its fastest pace since January 2024 and for the first time in six months. The Services PMI dropped to 48.9 (from April’s 50.1), underperforming expectations of 50.3.
Meanwhile, manufacturing remains weak despite a marginal PMI improvement from 48.0 to 48.4—still below growth thresholds. Business sentiment has also deteriorated: Eurozone economic confidence fell for a second consecutive month, hitting its lowest level since October 2023.
The confidence decline was sharpest in services, where optimism plunged to levels unseen since September 2022.
“These figures confirm the eurozone economy continues struggling to gain forward momentum,” said Dr Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
