Overview
- The S&P Global PMI Flash released on Thursday showed the composite index fell to 43.5 in May from 47.6 in April, a reading under 50 that signals broad private‑sector contraction.
- Services were the main drag with the services PMI sliding to 42.9, its weakest level in 66 months and the sharpest drop seen in the sector since late 2020.
- Manufacturing weakened sharply as the production index fell to 46.4 from 52.8 and the overall manufacturing measure dropped to 48.9, both marking six‑month lows.
- S&P analysts and surveyed firms linked the deterioration to an oil‑related energy shock that pushed up fuel and input costs, and price indices rose in May, signaling higher inflationary pressure.
- Economists warned the shock raises recession risk and could squeeze households and firms through higher pump and transport costs; official data next week and policy moves from Paris will be watched for signs of a broader slowdown.