Services set for recovery
ADVANCED economies are firmly on track to register positive growth in the third quarter, a series of leading surveys revealed yesterday, supporting hopes that the revival in the global economy is now entrenched.
The US services sector expanded for the first time in 13 months according to the non-manufacturing ISM figures for September, which rose to 50.9 from 48.4 in August. The business activity index jumped by 3.8 points to 55.1 – this key index is up by nine points in the past two months, while new orders moved up by a solid 4.3 points.
This side of the Atlantic, the UK CIPS/Markit services purchasing managers’ indices (PMIs) were equally healthy. The UK services sector rose to 55.3 in September from 54.1 in August, the fastest rate of expansion in this area in two years.
Over the third quarter, the index has registered an average of 54.2, the best quarterly performance since the third quarter of 2007 and puts the UK economy on course to record growth of around 0.4 per cent in the three months to September.
Henderson New Star’s Simon Ward said: “A weighted average of services new business and manufacturing new orders is only just below its long-term average, supporting hopes of GDP growth of two per cent annualised or more during the second half.”
These predictions were supported by UK firms proving more optimistic about the coming year than they have been since April 2007. The future expectations index rose to 75 from its 12-month low of 49.5 last November.
And Eurozone services expanded in September for the first time since April 2008, as the purchasing managers’ index rose to 50.9, from 49.9 in August.