Europe: December services purchasing managers’ survey results from data provider Markit were generally weaker than in November, and if it weren’t for an impressive resurgence in Spain, the overall euro-zone services sector would barely have registered an expansion. The combined index for the currency area came in at 51.0, just one point above the expansion/contraction cutoff mark of 50. That was down from 51.2 in November and in line with forecasts. Spain’s index jumped to 54.2 from 51.5 in the prior month, but France’s dropped to 47.8, which was slightly better than forecasts for 47.4 but still at its lowest level in seven months. Italy’s rose from 47.2 to 47.9 but fell short of a consensus forecast for 48.5. Germany’s services sector continued to expand, but its index softened from 55.7 to 53.5 and fell below the consensus estimate of 54.0. The U.K index dropped also.
It hit 58.8, against expectations for there to have been no change from the 60.0 level it posted in November.
For the euro zone as a whole, this data series shows domestic demand remains subdued–manufactured exports are a primary growth driver for the time being. By contrast, the U.K.’s still very strong services PMI numbers show the country’s booming housing market continues to support consumption demand, which is flowing through to services.
CHINA: HSBC’s services purchasing managers index fell to 50.9 in December from 52.5 in November.
It is the first time since April months that all four China PMIs declined–including official surveys on manufacturing and services, and private counterparts from HSBC. That squares with economist expectations that China’s growth slowed to 7.6% on-year in the final quarter of 2013, from 7.8% in the third quarter. One reason for the slowdown may lie in tighter credit, which reached crisis levels in June and has remained relatively tight since, highlighted by another spike in interbank interest rates ahead of the year-end. That also could help explain why small and medium-sized businesses fared worst in the various PMIs. On the positive side, the surveys suggest China’s services sector is doing better than its manufacturing, which fits with government efforts to rebalance the economy toward domestic consumption.
INDIA: India’s services sector contracted for a sixth straight month, the longest period of contraction in activity since the global financial crisis. The HSBC Service Sector Business Activity Index, prepared by Markit, fell to 46.7 in December from 47.2 in November
Source: WSJ
