Wednesday 6 November 2013

US, China and UK services accelerate

The US economy appears to have come out of the budget impasse and partial government shutdown last month relatively unscathed. Activity in the services sector accelerated in October, with the Institute for Supply Management’s non-manufacturing index rising to 55.4 from 54.4 in September, according to a report on Tuesday. This followed another report from the ISM last week showing that the manufacturing PMI also rose last month.

China's services sector activity also accelerated in October. A report on Tuesday showed that the HSBC/Markit services PMI rose to 52.6 from 52.4 in September while a report on Sunday from the National Bureau of Statistics showed that the official non-manufacturing PMI rose to 56.3 from 55.4.

Completing the positive picture for global services activity on Tuesday, a report from Markit showed that its UK services PMI rose to 62.5 in October, the highest since May 1997, from 60.3 in September.

In further positive news for the UK, a report from the British Retail Consortium on Tuesday showed that retail sales rose 2.6 percent year-on-year in October, up from 2.4 percent in September, while like-for-like sales rose 0.8 percent, up from 0.7 percent the previous month.

The eurozone economy, however, is expected to struggle to regain momentum. In its latest forecast released on Tuesday, the European Commission sees the region contracting by 0.4 percent this year, then recovering by 1.1 percent in 2014, less than the 1.2 percent that it forecast in May.

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