European economy is showing signs of revival

The business activity in Europe has adapted to the high interest rates and is demonstrating steady revival thanks to the gradual recovery in domestic and external demand, the preliminary May data from Hamburg Commercial Bank (HCOB) and S&P Global suggest. The composite PMI of the Eurozone countries in May reached the maximum of 52.3 points during the year (the values exceeding 50 points indicate the expansion of business activity, while the values below indicate its contraction).

The main contribution to the composite index in May, similar to previous months, was made by the services sector. Yet, the industrial indicator also improved significantly: although still in the negative zone, the PMI in manufacturing amounted to 47.4 points after 45.7 points in April, which is the maximum for 15 months.

The business activity in Europe’s largest economy, Germany, has been expanding for the second consecutive month in May, with the composite PMI reaching 52.2 points after 50.6 points in April. The indicator in services reached the highest level in 11 months, 53.9 points. The industrial PMI increased to 45.4 points in May compared to 42.5 points in April.

Overall, the European companies were more optimistic about the outlook for future business activity in May, according to HCOB and S&P data.