Eurozone PMIs (May, flash) Worrying signals on economic activity

Research evidence excerpt

Eurozone PMIs (May, flash) Worrying signals on economic activity

Economics

21 May 2026

by 3.6pts. Manufacturing input prices continued to surge (at the highest since June 2022) while output prices remained elevated, but

did not accelerate further.

The composite PMI for the eurozone excluding France and Germany declined from 49.9 to 49.0, its lowest level since October

2023. It reflected a sharp drop in services PMI (47.7 from 49.1). In contrast, manufacturing PMI improved (53.4 from 52.7) and even

rose to its highest level since May 2022 (worsening suppliers delivery times contributed to the rise but there were also improvements

across the board in all major subcomponents).

Implications

Overall, the eurozone PMI surveys broadly sent a dovish message for the ECB. Granted, input prices rose further but output prices

were steadier, suggesting limited pass-through from rising costs for the time being. In addition, signals on activity were quite

worrying, even if the broad picture remains uneven.

Country-wise, the PMIs suggest that the weakness is more acute in France than in the rest of the eurozone but it remains to be seen

if it will be confirmed by the French national surveys (INSEE, Bank of France) as we tend to give more weight to these surveys in

case of discrepancy (the INSEE business confidence survey will be released tomorrow).

Sector-wise, services remains the most impacted sector by the conflict in the Middle East, possibly reflecting the negative impact on

travel and transport services. However, the PMIs also suggest that after a period of resilience, manufacturing activity is also starting

to be impacted. It would be consistent with the idea that front-loading effects (with firms bringing forward orders in order to avoid