Euro Area Services Activity Lowest Since 2021

The S&P Global Eurozone Services PMI fell to 46.4 in May 2026 from 47.6 in April, below forecasts of 47.7, preliminary estimates showed. The reading pointed to the largest contraction in services sector activity since early 2021, with business activity decreasing solidly and new export orders also falling. In addition, price pressures remained elevated due to disruptions caused by the war in the Middle East and there was the first scaling back of workforce numbers since the start of 2021. In addition, service providers were at their least confident since September 2022.

The S&P Global Eurozone Services PMI was revised up slightly to 47.6 in April 2026 from 47.4, but still fell from 50.2 in March, marking its first move into contraction in nearly a year and the sharpest decline in activity since February 2021. Demand weakened further, with new orders falling at the fastest pace since October 2023, partly due to a drop in export business. Employment was broadly unchanged for a second consecutive month, a notable shift from the strong hiring trend seen in previous years. Backlogs were reduced at the quickest pace since March 2025, suggesting firms are working through existing orders. Meanwhile, cost pressures intensified, with input and output price inflation rising to multi-year highs. Business confidence also deteriorated, dropping to its lowest level in 42 months.

The S&P Global Eurozone Services PMI eased to 50.2 in March 2026 from 51.9 in February and close to the preliminary 50.1 estimate, marking the weakest performance since May last year. Demand conditions deteriorated, with new business falling for the first time since July 2025 and at the fastest pace in 16 months, while export sales also declined more sharply. Service providers continued to work through backlogs, extending a trend seen since November, and employment levels were broadly unchanged, with hiring activity near a five-year low. Business confidence weakened notably, dropping to a ten-month low amid rising uncertainty. At the same time, cost pressures intensified, with input price inflation accelerating to a 34-month high, although the pace of increase in prices charged slowed slightly compared to February.