Germany's private sector activity contracted for a second consecutive month in May. The Iran war has slowed the country's economic recovery, hitting demand and driving up prices.
The composite flash Purchasing Managers' Index (PMI) compiled by S&P Global rose slightly to 48.6 in May from 48.4 in April, but remained below the 50 threshold indicating contraction.
The composite index tracks services and manufacturing, which together account for over two-thirds of the euro zone's largest economy.
The service sector led the decline, with business activity falling for a second straight month, though at a slower pace. The flash PMI for services rose to 47.8 from 46.9.
Manufacturing stalled, with the index dropping to 49.9 from 51.4 in April.
Firms reported reduced demand for goods and services in May, citing customer hesitancy due to economic and geopolitical uncertainty and rising prices squeezing spending power.
