| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Global Economy Last Updated: Jul 8, 2011 - 4:01 AM

Growth of global service sector slows in June but job creation remains solid
By Finfacts Team
Jul 7, 2011 - 5:00 AM

Email this article
 Printer friendly page
Source: Markit

June saw a modest deceleration in the rate of expansion of the global service sector. The JPMorgan Global Services Business Activity Index fell to 52.1, down from 52.5 in May. Although the recovery in activity has now been sustained for almost two years, the pace of growth has lost impetus in Q2 2011.

For the Q2 as a whole, the average business activity index reading is 51.9. This is the lowest quarterly outcome since the recovery began in Q3 2009 and well below Q1 2011's post-recession peak of 57.0. The service sector is therefore likely to be a lesser positive growth spur for global GDP than at the start of the year.

Underlying the weaker expansions of business activity so far in mid-2011 has been a similar marked slowdown in new business growth. The fragility of the recovery in the service sector was also highlighted by a slight decrease in outstanding business.

Backlogs of work fell for the first time in six months, suggesting that part of the increase in activity may have only been sustained through a reduction in work outstanding.

National PMI (Purchasing Managers' Index) data continued to point to a broad-based recovery in business activity. Almost all of the surveys for which June data were collected signalled an increase in activity, the sole exceptions being those for Japan and Italy.

The former saw its rate of contraction ease further from those seen during the Tohoku earthquake affected month's of March and April. The latter, meanwhile, saw output fall for the first time since January and to the greatest degree in almost two years.

Rates of growth in business activity were little changed in the US, China and the UK, slowing slightly in the US and China (to a 17-month low in the former) and edging higher in the UK.

The rate of increase eased sharply in the Eurozone, but remained above the global average. Growth of euro area services activity was led by robust expansions in Germany and France, whereas the performances seen outside of the big-two Eurozone economies were comparatively subdued.

Job creation was recorded in the global service sector during June, extending the current period of sustained increase to a year. Employment rose in the US, the Eurozone, China, the UK,

India, Brazil, Hong Kong and Russia. Job losses were seen in Japan, Italy, Spain, Australia and Ireland.

Cost inflation eased sharply in June, reaching a nine-month low. Input prices have now risen in each month since August 2009. The steepest easing in cost inflation was seen in the US.

Commenting on the survey, David Hensley, Director of Global Economics Coordination at JPMorgan, said: "The PMI data confirm that growth of services activity lost steam during Q2 2011. The quarterly rate of expansion eased from Q1's post-recession peak to its weakest during the ongoing recovery, meaning that the sector's contribution to broader GDP growth will lessen. However, with job creation apparently still reasonably solid and inflation beginning to diminish, consumer demand for services is likely to strengthen in coming months."

The Global Report on Services is based on the results of surveys covering around 3,500 executives carried out in the USA by ISM (Institute of supply Management), 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.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Global Economy
Latest Headlines
Strong Swiss franc gloom deepens for exporters
Global investors shift focus to China; EM outflows surge to $1tn in 13 months
Global oil glut will continue into 2016
Stable growth momentum in OECD area but slowing expected in China
Prices for major food commodities in July lowest since September 2009
Global manufacturing in July weakest level in two years
US, China and UK lead top 25 target countries for foreign direct investment
Budget surpluses rare in developed countries from 1980s; Italy, France, Greece had none in 60 and 40 years
Singapore, London and Shanghai top cities for new FDI projects in 2014; Dublin in 11th place
Exchange rates shuffle as Dublin ranked 49th most expensive city; Paris at 46; Berlin at 105
Western consumer groups under pressure in China and India
Developing countries facing “structural slowdown” likely to last for years
OECD BEPS Tax Project: Amazon books UK sales in UK; Australia proposes up to 100% in penalties
Emerging Markets Index falls to 12-month low in May as manufacturing contracts
US and world economies slowing in 2015 — OECD
Global manufacturing production rose slightly in May; Trade flows weak
GDP growth in OECD area slowed to 0.3% in the first quarter of 2015
Only one quarter of workers worldwide have stable employment contracts
Automatic Exchange of Tax Information: OECD says countries won't be able to game system
Gates Foundation loses in Swiss family's shares coup
Minimum wage levels in OECD countries
Brent oil benchmark over $68 a barrel - up almost 50% in 2015
Global growth slows and manufacturing dips to 21-month low
Family-controlled firms dominate European business
Top 10 of world’s 250 largest consumer products companies account for 30% of sales
Nine of world's 20 fastest growing economies in Africa
Globalisation maybe stalling as trade growth remains weak
Global growth prospects uneven across major economies says IMF
Emerging markets growth lowest since 2009; Global growth at 30-year average
China's economic rebalancing hitting Latin American economies
New York, London, HK & Singapore top global financial centres index; Dublin recovers
Global growth in modest expansion from low oil prices/ monetary easing says OECD
Composite leading indicators point to positive change in growth momentum in the Eurozone
Global labour market trends portend paradise for some but uncertainty for many workers
Vienna remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich and Geneva overtake Singapore to become world's most expensive cities
HSBC Switzerland and Falciani: How it happened
Global economic power to continue shift from advanced economies
Global food price index falls in January; Cereal output set for record
Global debt has risen $57tn or 17% of world GDP since 2007