Global service sector activity growth continues to rise in August

The pace of growth in global service sector business activity continued to rise in August. The J.P.Morgan Global Services Business Activity Index was up to a four-month high of 51.5, a tad higher than July’s 51.4. The trend in the pace of output growth has continued to be quite muted throughout the year-to-date. This is underlined by the headline Business Activity Index having been unsuccessful so far in 2016 to post a reading above the lowest figure registered in the whole of last year, said Markit Economics.

The data for August hinted at additional growth of output at providers of business and financial services, both of which gained from increasing levels of incoming new work. On the contrary, the consumer services sector activity fell a bit after rising for two straight months.

Out of 13 countries for which August services PMI data were available, ten nations recorded growth in business activity. Brazil, Hong Kong and Japan were the exceptions that did not register growth. Brazil recorded the most subdued performance for the seventh straight month and registered a steeper downturn in services activity as compared to July.

The most solid rises in business activity were witnessed in Spain, Ireland and India, with paces of growth rebounding in all the three countries. The growth rate in the U.S was just marginal and the weakest during the current six-month sequence of growth.

Paces of rises rebounded in China and decelerated in Russia, whereas in the U.K. it came back into expansion territory. Growth was little changed in the euro area, as solid paces of growth in Italy, France, Ireland and Spain countered a marked slowdown in Germany.

The pace of job creation in the global service sector slowed to a three-year low in August. Employment rose in the U.S., the U.K., the euro area and Russia. Losses of job were witnessed in France, Japan, Brazil, India and Hong Kong. Average output prices increased slightly in August, while cost inflation eased to a five-month low and remained quite below its long-run survey average, stated Markit Economics.