Investing.com - Manufacturing activity in the euro zone expanded at the slowest rate in six months in May, underlining concerns over the health of the region’s economy, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary manufacturing purchasing managers’ index declined to a seasonally adjusted 52.5 this month, down from a final reading of 53.4 in April. Analysts had expected the index to ease down to 53.2 in May.
Meanwhile, the preliminary services purchasing managers’ rose to a 35-month high of 53.5 in May, up from a reading of 53.1 in April. Analysts had expected the index to fall to 53.0 this month.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Commenting on the report, Chris Williamson, Chief Economist at Markit said that “GDP looks set to rise by 0.5% in the second quarter after the lackluster 0.2% rise in the first three months of the year.”
He added that, “Deflationary pressures remain a major issue, however, and the ongoing fall in average prices charged for goods and services adds to the likelihood of the ECB taking action to boost the economy at its June meeting.”
Following the release of the data, the euro held on to losses against the U.S. dollar, with EUR/USD shedding 0.02% to trade at 1.3683, compared to 1.3680 ahead of the data.
Meanwhile, European stock markets were mixed. The Euro Stoxx 50 dipped 0.1%, Germany''s DAX picked up 0.2%, France’s CAC 40 eased down 0.1%, while London’s FTSE 100 added 0.2%.