Global service sector saw weakest growth since Q4 2012
Staff Writer |
The global service sector continued to make slow and steady progress at the end of the third quarter.
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Growth of business activity remained subdued by the historical standards of the survey, despite hitting a five-month high.
However, over the third quarter as a whole, the rate of expansion was the weakest since the final quarter of 2012. 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 – posted 51.6 in September, up from August’s 51.3, extending its sequence above the neutral 50.0 mark to four years.
Note: due to a later release date, September data for the China Services PMI were not available for inclusion in the Global Services PMI readings.
The strongest output growth was seen in Financial Services during September, with the rate of increase in this sector accelerating to a nine-month high. Consumer service providers also saw a return to expansion, following a slight contraction in August. Business services activity rose at the slowest pace for three months.
Output expanded in nine out of the 12 nations for which September data were available. Growth accelerated in the US (five-month high) and France (15-month peak), but slowed in Germany, the UK, Italy, Spain, India, Russia and Ireland. Downturns continued in Brazil and Japan.
Brazil again saw the sharpest contraction (albeit slower than in August), while the rate of decline in Japan was one of the quickest for over four years. Global service sector job creation eased to a 42-month low in September. Employment increased in the US, the eurozone, the UK and India, but fell in Japan, Italy, Brazil, Russia and Hong Kong.
Cost pressures remained subdued in September. Input prices have risen throughout the past seven years, although the latest increase was markedly below the longrun average. Output charges rose slightly for the fifth straight month, reflecting mild increases across the business, consumer and financial services sectors. ■
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