Service sector growth ticks higher at start of 2014
J.P.Morgan Global Services PMI at 53.8 in January, up from 53.5 in December posted a reading close to last September's two-and-a-half year high. Global services business activity expanded for the sixteenth successive month in January.Ireland and the UK remained at the top of the global services PMI activity growth league table in January, despite rates of expansion ticking lower in both nations. Higher activity in Germany and Ireland, meanwhile, offset contractions in France and Italy to take the current recovery in eurozone services into its sixth month. The US saw a solid expansion in output; growth was comparatively modest in Japan, while India and Brazil saw contractions.
The level of new business rose again in January, extending the current sequence of unbroken expansion to four-and-a-half years. Although the rate of increase in new orders eased to a three month low, the combination of rising demand and higher activity encouraged service providers to further increase employment.
Payroll numbers rose for the forty-seventh consecutive month, with the rate of jobs growth remaining above the average for this sequence. Increases were signalled for the US, Japan, Germany, the UK, Spain, India, Brazil and Ireland. Cuts were reported by France, Italy and Russia.
Firm's willingness to take on additional staff was also aided by their optimistic outlook for the service sector. Service providers expect business activity to be higher in one year's time than current levels, with the degree of optimism reaching a three-year record.
On the prices front, input cost inflation accelerated slightly in January, but remained below the long-run series average. Companies were able to pass on at least part of the cost increase as output charges rose for the seventh straight month.
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