24
May 2011 | Lindsay Clark
Input
costs across the eurozone are continuing to rise, but at a slower rate because
of a drop in the price of oil, according to a survey of European buyers.
The
Flash Eurozone Composite Output Index - a Purchasing Managers’ Index
published by Markit - stood at
55.4 in May, indicating growth but at a slower pace than the 57.8 recorded in
April. A figure of 50 indicates no change.
Although
business activity slowed, companies also found cost inflation eased. Average
prices charged for goods and services, such as fuel, rose for the tenth month running, but the
rate of inflation cooled from the near-record high seen in April, slipping to its
lowest figure in four months.
Chris
Williamson, chief economist at Markit, said: “The Eurozone PMI continued to
show robust expansion, but the rate of increase showed the sharpest slowing
since just after the collapse of Lehman’s in late 2008. It is not clear the
extent to which this reflects temporary factors such as the timing of Easter
and disruptions to supply chains emanating from the earthquake in Japan, but a
deterioration in business confidence in the service sector to the weakest since
July 2009 suggests that a more fundamental slowing in the pace of economic
growth is occurring.
“There
was good news on the inflation front, with the recent fall in oil and other
commodity prices feeding through to help slow the rate of inflation of both
companies’ costs and their selling prices,” he added.
The
Flash Eurozone PMI report is based on around 85 per cent of usual monthly
replies, and gives an early indication of trends.
