Eurozone economic growth remained robust in May despite headwinds associated with the Ukraine war, Covid-19 pandemic supply constraints and the rising cost of living, S&P Global said Tuesday.
The eurozone composite purchasing managers index edged down to 54.9 in May from 55.8 in April, according to the preliminary reading. This figure indicates an expansion of economic activity for the 15th successive month, with the rate of growth easing only modestly.
While the service sector continued to report strong growth from pent-up pandemic demand, the manufacturing sector saw only a modest expansion for the second month running amid falling order book inflows, according to S&P Global.
“Although factories continue to report widespread supply constraints and diminished demand for goods amid elevated price pressures, the economy is being boosted by pent-up demand for services as pandemic-related restrictions are wound down,” Chris Williamson, chief business economist at S&P Global Market Intelligence.
Both sectors continued to report solid hiring, with the service sector reporting the strongest jobs gain for almost 15 years, S&P Global said.
Prices charged for goods and services rose at the second-highest rate yet recorded by the survey, though the rate of inflation cooled slightly compared to April.
“Although there are signs that inflationary pressures could be peaking, with input cost inflation down for a second successive month and supply constraints starting to be less widely reported, inflationary pressures remain elevated at previously unprecedented levels,” Mr. Williamson said.
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