Services side of economy is vibrant

THE services side of the economy has shown its fastest growth rate since April 2002, according to the NCB Stockbrokers PMI services sector indicator.

In November, the PMI services index rose for the sixth successive month, reaching 59.5 last month from 57.3 recorded in October.

A figure over the 50 mark signals expansion of the economy.

NCB senior economist Eunan King said that the reading was very encouraging, with new business growing at its fastest pace since January 2001 and reaching 60.1.

The employment index rose to 52.9 from 51.2 in October, the best figure since April 2001 and the third successive month of growth.

Inflationary pressures continued to rise strongly, though at a slower pace than in October, while charges fell for the eighth month in a row.

Meanwhile, A global indicator based on national surveys of services companies shows that the sector expanded faster in November, said JP Morgan.

The indicator, produced by JP Morgan with research and supply management organisations, increased to 62.7 in November from 62.1 in October, rising further above the 50 line that divides growth from contraction.

It combines survey data from the United States, Germany, France, Britain, Italy, Spain, Ireland, Russia and Hong Kong.

In Britain, the main business activity index of the Chartered Institute of Purchasing and Supply/Reuters closely-watched report on services increased to 59.6 in November, up from October’s 59.1 and its best reading since June 1997.

It was also above the average economist forecast of 59.0.

The news follows Monday’s CIPS/Reuters purchasing managers’ index for manufacturing, which signalled the fastest pace of growth in the sector since December 1999.