The HCOB Eurozone Services PMI was revised up to 49.7 in May 2025 from an earlier estimate of 48.9 but still showed a slight contraction from April’s 50.1. This marks the first time since November 2024 that the index dipped below 50, signaling a mild decline in services activity. Demand remained weak, with new business falling for a fourth straight month, the sharpest drop in six months. International orders, especially exports, declined more quickly, contributing to the slump. Despite lower demand, employment in the sector rose, although hiring slowed to its weakest pace in three months. Backlogs of work continued to shrink for the 13th month, helped by the additional staffing. Business confidence improved slightly but remained historically low. On the inflation side, both input and output prices stayed elevated, close to April’s levels, and above long-term averages, suggesting ongoing cost pressures despite the weaker demand.