May PMI data shows Eurozone manufacturing expansion weakened due to rising costs and supply shocks from Middle East conflict.
Eurozone manufacturing activity expanded for a fourth consecutive month in May but at a slower pace, as the Iran war drove raw material costs higher and disrupted supply chains. The S&P Global Eurozone Manufacturing PMI fell to 51.6 from April’s 52.2, slightly above the preliminary estimate of 51.4, signaling weakening momentum in the sector.
Germany’s manufacturing sector stalled, while French factories contracted for the first time since November. The conflict has strained global energy supplies, particularly through the Strait of Hormuz, a critical route for oil and gas shipments. Asian factories, however, saw activity expand as firms stockpiled materials amid the uncertainty.
The disruptions have raised concerns among global agencies, including the IMF and World Bank, which warned of broader economic strain. Markets remain focused on the European Central Bank’s upcoming policy decisions as inflation pressures persist.