Growth in eurozone business activity slowed this month but was still relatively strong despite a cost of living crisis putting a dent in consumer spending power and a shortage of raw materials holding back expansion in manufacturing, a preliminary survey showed.
Growth in demand for services weakened – the new business sub-index fell to 55.2 from 56.6 – but firms did increase head count at a faster rate than in April. Momentum in Britain’s economy, outside the euro zone and European Union, slowed much more than expected this month, adding to recession worries as inflation pressures ratcheted higher, another survey showed.
Euro zone manufacturing input and output prices both remained high and factory managers passed on the increasing costs of materials to customers. The output prices index only nudged down from April’s record high of 77.3 to 76.0.