The global service sector continued to expand at a solid clip during December. Although 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 – edged lower to 53.6, from 53.8 in November, the pace of growth remained above the average for the current 53-month sequence of increase.
The fastest rates of output expansion were signalled in Ireland, the UK and the US. Growth accelerated in Japan, Spain, Russia, Ireland, but slowed in the US, Germany, the UK, China, Brazil and Hong Kong. In contrast, France, Italy and India registered continued contractions in business activity.
The latest expansion of service sector output was supported by a further marked increase in new business. New orders have risen continuously since August 2009, with December seeing the rate of growth hit a 34-month peak. Backlogs of work also increased during the latest survey period, the third rise in the past four months.
The upturns in output, new business and backlogs of work encouraged further job creation during December. Service sector employment rose for the forty-sixth consecutive month, with the rate of increase during the latest survey period in line with October's five-and-a-half year high.
The upturns in output, new business and backlogs of work encouraged further job creation during December. Service sector employment rose for the forty-sixth consecutive month, with the rate of increase during the latest survey period in line with October's five-and-a-half year high.
Average input price inflation eased for the second month running in December, taking the pace of increase to its weakest during the second half of 2013. Moreover, the rate of inflation was below the long-run survey average.
Average input costs rose in almost all of the nations covered by the survey, the sole exception being Spain (which saw no change over the month).
Commenting on the survey, David Hensley, Director of Global Economics Coordination at J.P.Morgan, said:
"The global service sector maintained solid growth momentum in December. Although the rate of output expansion ticked slightly lower, strengthening inflows of new business bode well for the coming quarter. Improved job creation should support demand, especially for consumer services.
