Eurozone businesses maintain steady growth

Germany is continuing to enjoy robust growth, Markit says

Business activity in the eurozone kept up a steady pace of growth in May, a survey has indicated, despite the pace of expansion slowing slightly.

The latest Purchasing Managers' Index (PMI) from research firm Markit dipped to 53.9, down from 54.0 in April. A figure above 50 indicates expansion.

However, the data suggested that the fortunes of businesses in France and Germany continue to diverge.

Earlier, a similar survey indicated an improvement in Chinese manufacturing.

The HSBC flash China Manufacturing PMI rose to 49.7 in May. Although this still indicates the sector is contracting, it was up from April's reading of 48.1 and the best figure for five months.

Acceleration in orders

Last week, official figures showed that the economy of the eurozone grew by 0.2% in the first three months of 2014, the same rate as the previous quarter.

However, Markit said that, despite the slight slowdown this month, the eurozone was on track to grow by 0.5% in the second quarter of the year.

"A slight easing in the euro area's rate of growth was seen in May but doesn't change the picture of a region that's enjoying its best spell of growth for three years, especially when an acceleration in growth of new orders suggests that the pace of expansion could pick up again in June," said Chris Williamson, chief economist at Markit.

"Of greatest concern is France, living up to its moniker of 'sick man of Europe' by sliding back into contraction as Germany continues to enjoy robust growth and the rest of the region experiences its best expansion since mid-2007."

France's PMI reading in May fell to 49.3, down from 50.6 in April, whereas Germany's reading was unchanged at 56.1.

Markit surveys about 5,000 firms in the eurozone to produce its PMI data. The latest readings are the initial "flash" estimates, which are based on responses from 85-90% of the companies.