Growth of global service sector steadies at start of Q3
Staff Writer |
The global service sector continued to expand at a modest rate during July.
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The pace of increase in business activity was unchanged from June’s four-month low, as growth of new work registered only a minor improvement.
At 51.3 in July, unchanged from June, the J.P.Morgan Global Services Business Activity Index – a composite index produced by J.P.Morgan and Markit in association with ISM and IFPSM – remained above the neutral 50.0 mark for the forty-sixth successive month.
Output and new orders expanded in both the business services and financial services sub-sectors during July.
In contrast, business activity at consumer service providers fell slightly for the first time in the year-to-date, mainly reflecting a dip in new order volumes for the second time in the past three months.
Nine out of the 12 nations for which July services PMI data were available registered growth of business activity. Brazil and Hong Kong saw steep drops in output, despite the respective rates of contraction easing to the slowest in 16 and 12 months.
UK service sector activity fell for the first time since December 2012 and at the sharpest pace for over seven years. Output growth in the euro area ticked higher, led by strong expansions in Germany and Spain. Russia also saw a solid increase in business activity.
Modest growth was registered in the U.S., China, Italy and India, whereas only minor expansions were seen in Japan and France. Global service sector employment increased in July.
The rate of job creation was unchanged from the prior month. Staffing levels rose in the US, the eurozone, India and Russia, but fell in China, Japan, Brazil and Hong Kong.
Global service providers reported the slowest increase in average input prices for four months during July.
This was partly passed on to clients, leading to a slight rise in output charges for the third month running.
Meanwhile, optimism regarding expected levels of business activity over the coming year recovered from June’s series low to reach a three-month high. ■