Eurozone private sector growth weakened to the lowest level in more than a year in May as improvements in Germany and France were offset by softening of activity outside the big-two economies.
The flash composite output index fell unexpectedly to a 16-month low of 52.9 from 53 in April, the results of the Purchasing Managers' Survey by Markit Economics revealed Monday. The index was forecast to rise to 53.2.
The services Purchasing Managers' Index held steady at 53.1, while it was forecast to rise to 53.3.
The manufacturing PMI dropped to 51.5 from 51.7 in the previous month. Economists had expected the score to improve to 51.9.
With the PMI having averaged 53.2 in the first quarter, the latest two months' weak data suggest that economic growth likely slowed in the second quarter.
Chris Williamson, chief economist at Markit, said, "A disappointing flash eurozone PMI for May adds further to the suggestion that the robust pace of economic growth seen in the first quarter will prove temporary."
Growth in Germany continued to strengthen across both manufacturing and services in May, with the overall growth reaching its highest since the end of the last year.
The small fall in the euro-zone composite PMI came as a bit of a surprise after earlier more positive country data from Germany and France, Stephen Brown at Capital Economics, said.
Although the European Central Bank is unlikely to announce new policy measures next week, it will eventually come under pressure to loosen monetary policy further, the economist added.
Germany's composite output index rose to a five-month high of 54.7 in May from 53.6 in April.
Manufacturers and service providers both reported stronger growth which some survey respondents attributed to the processing of backlogs and increased new orders.
The services PMI improved to 55.2 from 54.5 a month ago. It was above the expected reading of 54.6.
The manufacturing PMI came in at 52.4 in May, a 5-month high, and up from 51.8 in the previous month. The expected score was 52.
France also continued its shift out of stagnation with the activity improving to a 7-month high in May. The composite output index rose to 51.1 from 50.2 in April.
Contrasting trends were again seen in the services and manufacturing sectors. The services PMI climbed to 51.8, while it was forecast to remain at 50.6 as registered in April.
The factory PMI came in at 48.3, up from 48 in April. It was below the expected reading of 49.0. Output in the manufacturing sector declined for the second month running.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.