Euro area PMI falls in May

There was more evidence yesterday that a slowdown is hitting Europe. From Bloomberg:

Europe's service and manufacturing industries expanded at the slowest pace in five years in May after oil prices surged, the euro appreciated to a record and banks became more reluctant to lend.

A preliminary estimate of Royal Bank of Scotland Group Plc's composite index fell to 51.1 from April's 51.9, NTC Economics Ltd, which carries out the survey, reported today...

Today's decline was led by services. RBS's gauge of growth in services industries such as banking and telecommunications slumped to 50.6 from 52.0, matching a 4 1/2-year low reached in January. A measure of business expectations fell to 56.1 from 58.7, the lowest since November 2001...

RBS's index of manufacturing activity declined to 50.5, the lowest since August 2005, from April's 50.7. French consumer spending on manufactured goods unexpectedly fell for a second month in April as shoppers curbed purchases of cars and clothes, a report by France's statistics office showed today...

Italy avoided the fourth recession in a decade, even as a slump in consumer spending clouds the outlook for the rest of the year. Europe's fourth-biggest economy expanded 0.4 percent after contracting the same amount in the fourth quarter, Rome-based statistics office Istat said today.

The UK economy is already slowing. Bloomberg reports:

The U.K. economy grew at the slowest pace since 2005 in the first quarter after higher credit costs hurt construction and business services slowed.

Gross domestic product rose 0.4 percent in the three months through March, the Office for National Statistics said in London today. The result matched the agency's original estimate and the median forecast of 31 economists in a Bloomberg News survey. Business services including accountancy and advertising expanded at the weakest pace since 2003...

GDP growth slowed from 0.6 percent in the fourth quarter, and expanded 2.5 percent from a year earlier.