Global service sector maintains solid growth at end of 2016
Staff Writer |
Activity in the global service sector expanded at a solid pace in December.
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The ongoing upturn in output was underpinned by stronger inflows of new work and improved business confidence, all of which supported further job creation.
At 53.3 in December, unchanged from November, the J.P.Morgan Global Services Business Activity Index – a composite index produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – signalled expansion for the fifty-first successive month.
Output growth was sustained at a pace matching November’s 12-month high, rounding off the best quarter for the sector during 2016. However, a sluggish start to the year meant growth over 2016 as a whole was still (on average) weaker than during 2015. Activity increased across the business, consumer and financial services sectors during December. Consumer services continued to lag behind the other two categories, despite being the only sector to see its rate of expansion accelerate.
Ten out of the 13 nations for which December data were available registered expansions in service sector activity. The steepest rates of increase were registered in Ireland, Russia and the UK, all of which saw growth accelerate since November.
The upturns in the U.S., Spain and Germany also remained solid during December, although rates of expansion softened since the prior month. Elsewhere in Europe, growth picked up in France, but eased in Italy. A mixed picture was seen for the performances of the Asian service economies covered by the survey.
Japan and China both saw output growth gather pace, to 11- and 17-month highs respectively. In contrast, the downturn in India and Hong Kong continued. Meanwhile, Brazil also saw activity decline at the end of 2016.
Global service sector new business rose at the quickest pace for 13 months, a key factor underlying an improvement in business optimism to its second-highest level during 2016.
This in turn led to the sharpest pace of job creation in almost a year, with staff added in the US, the eurozone, China and the UK. Price pressures intensified in the global service sector during December.
Input cost inflation hit a near three-year high, leading to the sharpest increase in output charges since September 2014. ■