At 50.2, the final PMI composite index for May signalled a slower expansion of business activity. The latest print is 0.7 points above the flash estimate and consensus.
At the national level, the best-performing countries were Italy (52.5), and Spain (51.4), both of which experienced an expansion of business activities. The weaker performing countries were France (49.3), and Germany (48.5), which contracted, falling short of the 50-growth threshold.

The final services PMI for May was 49.7, 0.9 points above the flash estimate and consensus. This signalled slight contraction of service activity. New business fell again in May for the fourth month in a row while employment continued its modest increase for the seventh consecutive month. Business optimism improved from April's record two and a half year low, however it remained below the historical standard. Input costs and output charges remained stable in May.

The Eurozone PMI composite continued to experience expansion, albeit at a slower pace than in April. Today's data put the Eurozone RPI at minus 4 and the RPI-P at 9, meaning that economic activity is well within market expectations.

No change from the flash at 49.5 is the call for the May composite final, down from 50.4 in April. No change is expected from the flash at 48.9 for services, down from 50.1 in April.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.