The S&P Global Eurozone Composite PMI fell to 47.5 in May of 2026 from 48.8 in the previous month, firmly below market expectations of 48.8 to reflect the sharpest pace of decline in private-sector activity since October of 2023. Activity was weighed by a decline in services (46.4 vs 47.6 in April), the fastest in over five years, to underscore the impact of higher prices triggered by the war in Iran since March. In turn, manufacturing maintained its robust streak despite a slowdown (51 vs 52.3). New business at the aggregate level dropped sharply from the previous month with both sectors noting declines, driving firms to reduce their outstanding business levels to their lowest since late 2024. Input costs rose the most in three years, driving firms to raise charges by a similar magnitude and thus reducing client's purchasing power. Consequently, companies reduced their staffing levels for a fifth straight month, seen in both sectors. Likewise business sentiment deteriorated further.