Growth of activity across the Americas eased for the fifth successive month in December according to the latest survey data compiled by World Economics.
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The Headline Sales Managers Index (SMI) fell to 51.4 from 52.0 in November, the slowest improvement in business conditions in the survey history.
The SMI for the Americas (Canada, the US and all major Latin American economies) is designed to provide the earliest monthly source of understanding about the speed and direction of economic activity in this dynamic region of the world.
The headline index is derived from the average of business confidence, market growth, product sales, prices charged and employment indicators.
Latest data showed another slowdown in business activity in both Canada and the US with the rates of growth weakening for the fourth and fifth straight months respectively. Latin America, by contrast, saw a slower deterioration in activity over the month.
Moreover, despite reports of weaker demand conditions, business expectations were little-changed from the strong levels recorded in November.
The Business Confidence Index edged up to 54.5 in December, from 54.4 on the previous month. Companies in Canada and the US remained the most upbeat while companies in Latin America reported softer albeit still negative levels of business sentiment in the latest survey period.
Panel members attributed this to unfavourable exchange rates, rising inflation, high unemployment and uncertainty over oil prices.
The Market Growth Index fell for the fifth month running in December to reach the lowest level on record.
Nonetheless, the current reading continued to indicate modest expansions across the Americas’ markets. With the exception of Latin America, market growth continued to expand in both Canada and the US. Furthermore, the Product Sales Index fell for the eight consecutive month in December, signalling the first decline in product sales since January 2014.
Sales dropped in the US while rose at a stronger rate in Canada. In Latin America, sales continued to decline although at a slower rate compared to the previous month.
December data signalled a further deceleration in inflationary pressures, reflecting recent oil price declines. The Prices Charged Index fell to 52.4 from 53.6 in November, signalling the sixth consecutive month of declines and the lowest level recorded by the survey.
Prices charged eased markedly in Canada while softened to a marginal pace in the in the US. Elsewhere in Latin America, prices increased at a stronger rate.
Weaker increases in sales and market growth reportedly led companies across the Americas to shed jobs in December. The Staffing Index fell for the third straight month but nevertheless indicated only a marginal decline in workforce numbers.
Job losses were recorded in both Canada and Latin America, with the rate of decline in Latin America remaining sharp despite slowing since November. In the meantime, modest increases of employment were reported in the US. ■