The Eurozone has shown stable economic momentum, according to the IHS Markit Flash Eurozone Composite Purchasing Managers’ Index for the month of May. The Flash Eurozone PMI Composite Output Index remains at 56.8, unchanged from its final reading in April. The Flash Eurozone Services PMI Activity Index fell 0.2 points to 56.2, offset by the Flash Eurozone Manufacturing PMI which rose 0.3 points to 57. The Composite Output Index in France rose a full point to 57.6 and 0.6 points in Germany to 57.3. Employment and job creation also increased, corresponding to business optimism about the future.

Manufacturing output growth and exports increased at the highest rate in six years. Manufacturers hired employees at the fastest rate in over 20 years.

Price pressures remained elevated with an increase in output prices (the second fastest rate since July 2011). However, an ease in input cost inflation suggests a potential future decrease. Overall, these factors point to an anticipated second quarter increase in Eurozone real GDP of approximately 0.6%.