Key facts
- Canada's services PMI reached 50.6 in May, an 18-month high.
- The Eurozone services PMI fell to 47.7 in May, marking the third consecutive month of contraction.
- UK services sector activity contracted in May for the first time since April 2025.
- The US Services PMI fell to 50.7 in May, indicating slower expansion.
- US private employers added 122,000 jobs in May.
- The US ISM Services Prices Index rose to 71.3 in May.
- Mid-American Manufacturing PMI decreased to 54.4 in May.
- Singapore's manufacturing PMI rose to 51.0 in May.
- Egypt's non-oil private sector contracted in May.
- Eurozone retail sales decreased by 0.4% in April.
- UK house prices fell unexpectedly in May.
- Initial jobless claims in the US rose to 225,000 for the week ended May 30.
Global economic activity presents a mixed picture in May, with several regions experiencing rising cost pressures and varying degrees of expansion or contraction. Canada's services economy saw its Purchasing Managers' Index (PMI) reach 50.6 in May, the highest level in 18 months, indicating expansion. However, operating costs accelerated due to higher fuel and wage expenses, and new business experienced a marginal decline amid geopolitical uncertainty. The Eurozone's services sector, however, contracted for the third consecutive month, with the PMI falling to 47.7 in May. This downturn is attributed to input costs surging at their sharpest rate in three-and-a-half years and charge inflation hitting a 38-month high, suggesting a potential 0.2% quarterly GDP decline. The UK's services sector also contracted in May for the first time in over a year, with the PMI dropping to 49.3. Businesses in the UK reported high input cost inflation and a continued contraction in hiring. UK house prices showed mixed signals, with one index reporting no change in May, while another indicated an unexpected fall, potentially influenced by geopolitical tensions from the Iran war.
The United States services sector expanded at a slower pace in May, with the Services PMI falling to 50.7, down from 51.0 in April and below the forecast of 50.9. This marks one of the weakest months of growth in 2.5 years. The US ISM Services Prices Index, however, increased to 71.3 in May, indicating persistent cost pressures. The overall ISM Services PMI was 54.5, exceeding expectations, but the employment index contracted to 47.9. In the labor market, initial jobless claims rose to 225,000 for the week ended May 30, exceeding forecasts, though the labor market is described as stable. US private employers added 122,000 jobs in May, exceeding forecasts, with wages rising 4.4%. April's job gains were revised down to 105,000. The US PMI composite index for May was revised down to 51.5.
Manufacturing sectors showed varied performance. Singapore's manufacturing sector expanded in May, with its PMI rising to 51.0. Conversely, the Mid-American Manufacturing PMI decreased to 54.4 in May, the second-lowest reading this year, with 81% of supply managers reporting higher input costs. Egypt's non-oil private sector economy contracted in May due to escalating business costs, including higher input prices and a weakening Egyptian pound. Russia's economic activity saw monthly GDP growth slow to 1.3% in April, while its budget balance was -2.6% of GDP in May. Russia's foreign exchange intervention jumped significantly in June. Kyrgyzstan's credit growth decelerated to 44.7% year-on-year in April.
Economic growth indicators for the Eurozone showed a decline, with the Bank of Italy's €-coin indicator falling to 0.45 in May, attributed to weaker household and business confidence. Eurozone retail sales decreased by 0.4% in April, missing expectations. The data collectively points to persistent inflation, supply chain pressures, and geopolitical uncertainties impacting global economic sentiment and activity across various sectors and regions.