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Global Services PMI by JPMorgan
Global Services PMI Up +0.2% in November
Official Statement by JPMorgan The global service sector expanded for the sixteenth successive month in November, reflecting a further increase in new business.
* At 54.8 in November, the JPMorgan Global Services Business Activity Index was consistent with a solid rate of increase that was above the average for that period. Growth was faster than in the previous month, as signalled by an increase in the index from October's reading of 54.6.
* India reported the sharpest increase in business activity, with growth accelerating to a four-month high. Germany was in second-position overall, with activity rising at one of the fastest rates in the survey history. Growth eased in the US, China and Russia. Rates of expansion remained subdued in the UK and Brazil, while contractions were seen in Japan and Spain.
* David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The service sector recovery extended into a sixteenth successive month in November. It is positive that growth of services activity and new business both gained traction and to see the sector expanding at a faster rate than manufacturing. The labour market is still posting modest jobs growth and hopefully this will strengthen in the new year."
Cycle History The data on the chart below is limited to the latest 16 months ending November 2010. The current Global Services PMI of 54.8 is down -2.0 and -3.5% from the cyclical peak of 56.8 in April 2010. The current PMI is up +4.5 and +9% from the intermediate-term bottom of 50.3 in November 2009. Therefore, the current Global Services PMI is now closer to the cyclical top. The PMI is a percentage - not a total. More about the PMI below the chart.
* At 54.8 in November, the JPMorgan Global Services Business Activity Index was consistent with a solid rate of increase that was above the average for that period. Growth was faster than in the previous month, as signalled by an increase in the index from October's reading of 54.6.
* India reported the sharpest increase in business activity, with growth accelerating to a four-month high. Germany was in second-position overall, with activity rising at one of the fastest rates in the survey history. Growth eased in the US, China and Russia. Rates of expansion remained subdued in the UK and Brazil, while contractions were seen in Japan and Spain.
* David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The service sector recovery extended into a sixteenth successive month in November. It is positive that growth of services activity and new business both gained traction and to see the sector expanding at a faster rate than manufacturing. The labour market is still posting modest jobs growth and hopefully this will strengthen in the new year."
Cycle History The data on the chart below is limited to the latest 16 months ending November 2010. The current Global Services PMI of 54.8 is down -2.0 and -3.5% from the cyclical peak of 56.8 in April 2010. The current PMI is up +4.5 and +9% from the intermediate-term bottom of 50.3 in November 2009. Therefore, the current Global Services PMI is now closer to the cyclical top. The PMI is a percentage - not a total. More about the PMI below the chart.
Trend The current Global Services PMI of 54.8 regained the 12-month moving average of 54.1, which is ascending sharply, with the October surge upwards and continues above in November. Since the peak in April 2010, there had been 5 consecutive months (May through September) of declines before this October and November bounce off the bottom. However, any value over 50 indicates expansion so the growth was continuing, just at a slower pace.
Global Services PMI (Chart) Below is a chart of the latest 16 months of the Global Services PMI from August 2009 through the latest month reported, November 2010. The PMI has been greater than 50, indicating global services are expanding, since August 2009, for 16 consecutive months. The PMI peaked in April 2010 at 56.8. Five consecutive monthly declines ensued through September 2010 before this October and November bounce upwards. However, the 5 consecutive monthly declines still indicated global services was expanding, just at a slower rate.
Commentary This another month of positive data, a +0.2% increase in November, after a +2.3% surge upwards in October. This was after 5 consecutive monthly declines. The related USA ISM Non-Manufacturing Index (NMI) also increased and is reviewed here . The related JP Morgan Global Manufacturing PMI also increased in November and is reviewed here Overall, these USA and global economic indicators are now reporting an acceleration of the economic recovery in November.
About The PMI The Global Report on Services is based on the results of surveys covering around 3,500 executives carried out in the USA by ISM, and in Japan, China, the UK, Germany, France, Spain, Italy, Brazil, India, Russia, Ireland and Hong Kong by Markit, in Australia by AiG, New Zealand by Business NZ and Mexico by HSBC. These countries together account for an estimated 80% of global service sector output. For the US, data are taken from the ISM non-manufacturing survey which, in addition to the service sector included in the other countries, also includes agriculture, construction, mining, public administration, retail, utilities and wholesale sectors. The Hong Kong PMI also covers construction, manufacturing and retail. Questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease. 50.0 = no change level.
Data sources: Country % share of global GDP
United States 28.8
EuroZone 17.7
Japan 12.8
China 6.5
Germany 5.2
United Kingdom 4.3
France 3.8
Italy 2.9
Brazil 2.1
India 2.0
Spain 1.8
Australia 1.3
Russia 1.1
Hong Kong 0.6
Ireland 0.3
New Zealand 0.2
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