Overview
- A coordinated set of flash PMI readings published in late May showed the euro‑area private sector contracted and services activity weakened sharply as energy and transport costs rose.
- France, the UK, Germany and Australia recorded steep drops in services and falling new orders, with business confidence hitting multi‑month lows and job cuts spreading.
- Manufacturing held up in countries such as the United States, Japan and India because firms built inventories and front‑loaded orders, but that support is fading as new orders slow.
- Input‑price inflation accelerated to levels not seen since late 2022 and selling prices rose strongly, with Japan reporting its sharpest selling‑price increase in nearly 19 years.
- The surveys signal a growing policy dilemma for central banks: tighter monetary action could curb inflation but also deepen an emerging downturn and further weaken employment.