Euro Zone Private Sector Activity Shrinks at Fastest Rate in 18 Months as Cost Pressures Hit 3-Year High

Euro zone private sector activity shrank in May at the fastest rate in 18 months, according to a survey reported by @Reuters. Waning demand for goods and services dragged output lower for a second consecutive month. Cost pressures reached their highest level in more than three years during the same period.

The survey recorded the combined effect of softer demand and rising input costs across the bloc's services and manufacturing sectors. The data arrive as firms report fewer new orders and reduced production schedules. Output fell across both the services and manufacturing components that make up the private-sector measure.

The survey's findings are based on responses collected in May from purchasing managers at companies throughout the euro zone.