Euro Zone Stuck in ‘Low-Growth Phase’ as Business Activity Falls to 16-Month Low

There was more gloom for the euro zone on Monday with the latest flash purchasing manager’s index (PMI) falling to a 16-month low despite attempts by the European Central Bank (ECB) to boost growth and business activity in the region.

The preliminary PMI from Markit showed that business activity in the 19-country region fell to 52.9 in May versus 53.0 in April, failing to meet expectations for a reading of 53.2, according to a Reuters poll of analysts.

The PMI is a composite of services and manufacturing activity in the region and the 50-point mark separates expansion from contraction.

The latest PMIs suggest that economic growth has likely slowed in the euro zone in the second quarter and that business activity was likely to remain subdued, Markit said.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.