Eurozone economy outlook dims as sentiment weakens

BRUSSELS, May 23, (AFP): The pace of growth of eurozone business activity continued to slow in May, as companies became less optimistic about the state of the economy in Europe, a key survey showed on Wednesday.

Data monitoring company IHS Markit also flagged strong slowdowns in France and Germany, though employment growth in the 19-country single currency bloc remained robust.

The purchasing managers’ index (PMI) by IHS Markit fell to 54.1 in May, which was lower than forecasts by analysts. A figure over 50 indicates the economy is expanding.

The analysts at Markit cautioned that the slowdown in growth, which followed a bumper start of the year, was partly due to an unusually high number of public holidays in May.

“However, it’s also becoming increasingly evident that underlying growth momentum has slowed compared to late last year, especially in relation to exports,” said Chris Williamson, an economist at IHS Markit.

The PMI data aligned with a recent line of statistics that suggested the European economy was falling back from solid recovery.

Earlier this month, official data said growth in the eurozone slowed in the first quarter this year to 0.4 percent.

The data confirmed a warning by European Central Bank chief Mario Draghi that growth in the 19-country single currency bloc was reaching “some moderation” in the face of protectionist dangers.