Eurozone business activity steady in May

Markit's final composite purchasing managers' index was unchanged from April at 56.8, in line with the flash estimate and expectations, supported by strong growth of new business. Meanwhile, new orders rose at the same pace as in April, one of the steepest gains in six years.

In Germany, the composite PMI printed at 57.4 from 56.7 and was up from the flash estimate of 57.3, while France's PMI rose to 56.9 from 56.6 in May, but was below the flash estimate of 57.6.

Markit's eurozone PMI services business activity index nudged down to 56.3 in May from 56.4 the month before, but was a touch above the flash estimate of 56.2.

Chris Williamson, chief business economist at IHS Markit, said: "The final PMI readings add to mounting evidence that the eurozone is enjoying a strong second quarter, consistent with GDP rising at a 0.7% rate.

“Encouragingly, both the hard data and the surveys are revealing a broad-based upturn. So far in the second quarter the PMI surveys are running at levels indicative of 0.7% GDP growth in France and Germany, with nearly 1% being signalled for Spain and 0.5% in Italy. Official data have lagged behind the strength signalled by PMI data, but recent revisions to first quarter GDP estimates are now bringing the official numbers more in line with the surveys."

Pantheon Macroeconomics said the survey "continues to signal robust GDP growth in the eurozone economy".

"New business momentum remains solid, which is supporting output and employment growth. Tomorrow’s detailed Q1 EZ GDP data will confirm that the economy had a strong start to the year, and risks are tilted firmly toward an upside revision of the headline to 0.6% quarter-on-quarter, from the initially estimated 0.5%."