Boom Doom Economy: Global Services Sector Expansion Slows in March (Chart) *20th month of expansion*

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Global Services PMI by JPMorgan

Official Statement by JPMorgan The JPMorgan Global Services Business Activity Index fell to 54.0 in March, from February's near five-year high of 59.2. This was the lowest reading for six months and below the series average of 55.0.
● Please note that March data for China services and Hong Kong were not available for inclusion in the global services PMI at the time of publication.
● Commenting on the survey, David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The PMI indicates that growth of the global service sector eased sharply in March, with the slowdown focused in Japan. However, with the trend in the PMI new business index holding up comparatively well, it is hoped that this will prove to be a short term pause as opposed to a firm downshift in the sector’s recovery."

Trend The short term trend has now stopped and pulled back, after 5 consecutive monthly increases. The current Global Services PMI is now below the descending 12-month moving average of 55.5. (The 12-month moving average chart is not shown on this page).

Cycle History The JPMorgan Global Services PMI reached a Post-Great Recession cyclical peak of 59.2 in February 2011. A intermediate term cyclical low of 50.3 was set in November 2009. The PMI is a percentage - not a total. More about the PMI below the chart.

Global Services PMI (Chart) Below is a chart of the JPMorgan Global Services PMI from August 2009 through the latest month reported. The PMI has been greater than 50, indicating global services are expanding, since August 2009, for 20 consecutive months. The PMI peaked in April 2010. Five consecutive monthly declines ensued through September 2010, then current 5 consecutive monthly increases through February 2011 (a Post-Great Recession peak), before the March 2011 downturn. However, any reading above 50 still indicates global services is expanding, just at a slowing rate.

Commentary The Global services sector expanded for the 20th month, but at the slowest rate since September 2010. The Global Services PMI has dropped from the Post-Great Recession high and a 58-month high (highest since April 2006) set in February 2011. The slowing of expansion was also indicated by the related JPMorgan Global Manufacturing PMI and is reviewed here.

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.

Data sources: Country % share of global GDP

United States 28.6

Japan 12.3

China 7.4

Germany 5.0

United Kingdom 4.2

France 3.7

Italy 2.8

Brazil 2.2

India 2.2

Spain 1.8

Australia 1.4

Russia 1.0

Hong Kong 0.6

Ireland 0.3

New Zealand 0.2

J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $803 billion and operations in more than 50 countries. The firm is a leader in investment banking, financial services for consumers and businesses, financial transaction processing, investment management, private banking and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers nationwide, and many of the world’s most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the internet at http://www.jpmorganchase.com/.

Markit Economics is a specialist compiler of business surveys and economic indices, including the Purchasing Managers’ Index™ (PMI™) series, which is now available for 26 countries and key regions including the Eurozone and BRIC. The PMIs have become the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to www.markit.com/economics.

Founded in 1915, the Institute for Supply Management™ (ISM) is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education. ISM's membership base includes approximately 40,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit institute that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.

The International Federation of Purchasing and Supply Management (IFPSM) is the union of 42 national purchasing associations worldwide. Within this circle, about 200,000 purchasing professionals can be reached. IFPSM is a non-political, independent and non-profit oriented international organisation, registered in Aarau, Switzerland. IFPSM facilitates the development and distribution of knowledge to elevate and advance the procurement profession, thus favourably impacting the standard of living of citizens worldwide through improved business practices.

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