HCOB's final Composite Purchasing Managers' Index , compiled by S&P Global and seen as a good gauge of overall economic health, fell to a three-month low 52.8 in May from April's 54.1.
"Relatively resilient services activity growth should ensure that the euro zone regains some footing and shows a positive rate of expansion in the second quarter after GDP stagnated in the October-March period," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. Overall cost pressures were lower in May and both the composite input and output prices indexes fell. The output index dropped to 56.4 from 56.8, its lowest since April 2021.
Despite that, demand for services continued to rise and firms increased headcount, albeit at a slower pace. The employment index dipped to 54.6 from April's 11-month high of 55.6.