Economic activity in the eurozone returned to growth in May, albeit at a slower pace than the previous month. The growth is mainly due to the service sector, which includes for example tourism, catering and retail trade. This offset the contraction in the industrial sector, market researcher S&P Global announced on the basis of its index which tracks activity in the industrial and services sectors.
The S&P Global index, which measures overall activity in the euro area, fell to 53.3 from 54.1 the previous month. A level of 50 or higher indicates growth. The figure was slightly lower than economists’ expectations.
Growth in the services sector was slightly lower than expected. The contraction in industry was also larger than expected due to a further decline in demand for goods. The level of activity in the sector fell to its lowest level in three years. Economists expect the Eurozone economy to grow in the second quarter, thanks to the recovery of the services sector. In the first quarter, the economy of the euro countries grew by 0.1 percent on a quarterly basis.
Germany
In Germany, the euro area’s largest economy and the Netherlands’ main trading partner, activity grew more than expected and May recorded growth for the fourth consecutive month. This was entirely due to growth in the services sector, which hit its highest level in 21 months. However, German industry contracted again, with activity falling to its lowest level in three years. The German economy therefore remains on the brink of recession.
In France, the growth rate of economic activity slowed to its lowest level in four months. This is due to the fact that growth in the services sector was lower than in the previous month. The contraction in the manufacturing industry was slightly less than in April.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
