Overview
- Mid‑May flash PMIs showed the euro zone private sector contracted with a composite reading of 47.5, signalling a likely 0.2% GDP decline in the second quarter and the fastest fall in activity in over two years.
- France recorded the steepest drop in private‑sector activity in five‑and‑a‑half years with services at 42.9 and a composite of 43.5, and Germany posted a second month of contraction with a composite PMI near 48.6.
- Across Europe and in Japan, input‑price inflation accelerated to multi‑year highs and firms reported higher fuel, transport and raw‑material costs that have led some companies to raise selling prices.
- Japan kept expanding overall thanks to manufacturing, but its services sector stalled and selling‑price inflation hit near‑record rates, while India remained strong with a 58.1 composite PMI despite slower factory momentum.
- Australia's private sector slipped back into contraction at a 47.8 composite reading, with new orders falling sharply, confidence at record lows and firms citing the Middle East conflict for supply delays and cost pressure.