Earlier on Wednesday, services data from the Eurozone disappointed, with Germany, France, and Italy all missing the forecasts of economists, following on from another weak set of data on Monday, when manufacturing across the continent missed expectations. The production index dropped 0.8 point to 51.4.
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“The headline Purchasing Managers” Index posted at 48.6 in January, up from 48.0 in December, thereby indicating a weaker rate of deterioration in operating conditions at Malaysian manufacturers. The trend in new export order inflows strengthened during January, amid reports from companies of improved sales demand. It registered 53.4 compared with December’s 54.5, up from the flash 53.2 estimate.
As expected, the price index rose sharply in January.
Following the contraction in December in the wake of Chennai floods, January saw the Indian manufacturing sector rebound into expansion territory, as production and new orders recovered, the report said. New orders are one indicator of services activity.
The downbeat report said that aside from the pre-election slowdown recorded last April, this latest reading was the lowest since June 2013.
There still appears to be plenty of spare capacity in many companies, with overall employment in the sector falling for the fourth time in six months.
In addition, the construction survey said housebuilding activity expanded at its second weakest pace for just over two-and-a-half years. The January 2015 print shows contraction again and came in below the Dec15 value. The January print is over the average of the past three Jan readings and is also the 6th-highest figure for the month.
The UK services sector unexpectedly grew in the first month of 2016, according to the Markit/CIPS services purchasing managers’ index (PMI).
“If the slowdown in business activity wasn’t enough to worry policymakers, prices charged by producers fell at the fastest rate for a year to spur further concern about deflation becoming ingrained”. The current print marks the 2nd-lowest for the month since 1995. Although the rate of expansion was only moderate, it was the sharpest signalled for four months.
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The survey’s findings were mixed – new business at services firms rose at the fastest rate since July.
