Eurozone Preliminary Manufacturing PMI beats estimates with 62.8 in May

The Eurozone manufacturing sector activity maintained its pace of expansion in the reported month, the latest manufacturing activity survey from IHS/Markit research showed on Friday.

The Eurozone Manufacturing purchasing managers index (PMI) eased slightly from 62.9 in April to 62.8 in May and beat 62.5 expectations by a big margin. The gauge corrected from record highs to hit three-month lows.

The bloc’s Services PMI jumped to 35-month highs of 55.1 in May vs. 52.3 expected and 50.5.

The IHS Markit Eurozone PMI Composite expanded sharply to 56.9 in May vs. 55.1 expected and 53.8 previous.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“Demand for goods and services is surging at the sharpest rate for 15 years across the eurozone as the region continues to reopen from covid-related restrictions. Virus containment measures have been eased in May to the lowest since last October, facilitating an especially marked improvement in service sector business activity, which has been accompanied by yet another near-record expansion of manufacturing.”

“Growth would have been even stronger had it not been for record supply chain delays and difficulties restarting businesses quickly enough to meet demand, especially in terms of re-hiring. The shortfall of business output relative to demand is running at the highest in the survey’s 23-year history.”

FX implications

The shared currency tumbled 15-pips in a delayed reaction to the mixed German PMIs, now trading at 1.2215, down 0.09% on the day. The major remains unimpressed by the big beat on the Eurozone Manufacturing and Services PMIs.