LONDON (Reuters) - Euro zone business activity picked up a touch last month but remained in low gear and forward-looking indicators suggest the bloc’s economic growth won’t accelerate anytime soon, a survey found.
IHS Markit’s Euro Zone Composite Final Purchasing Managers’ Index (PMI), considered a good measure of overall economic health, nudged up to 51.8 in May from April’s 51.5.
While that was higher than an earlier flash reading of 51.6 it remained close to the 50 mark separating growth from contraction.
IHS Markit said the PMI pointed to second quarter growth of 0.2%, weaker than the 0.3% predicted in a Reuters poll late last month and slower than the 0.4% the bloc’s economy expanded in the first quarter.
“The overall picture remains one of weak current growth and gloomier prospects for the year ahead,” said Chris Williamson, chief business economist at IHS Markit.
“There seems little prospect of any immediate improvement: new orders barely rose in May, painting one of the gloomiest pictures of demand seen over the past six years, and companies’ expectations of growth over the coming year likewise fell.”
A sub-index measuring new business fell to 50.4 from 51.0, one of its lowest readings in six years.
The PMI covering the euro zone’s dominant services industry crept up to 52.9 from April’s 52.8, helping to offset a fourth month of contraction in manufacturing.
With new business growth slowing, optimism among services firms declined. The business expectations index fell to a four-month low of 61.1 from April’s 62.2.
Reporting by Jonathan Cable; Editing by Catherine Evans