Wednesday, March 03, 2010
Strong services
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

Further evidence against a first-quarter double-dip has been provided by the service-sector purchasing managers' index, which greatly exceeded expectations by rising from 54.5 to 58.4. Taken together with the other PMIs, the surveys are consistent with output expanding at a good pace.

This is the verdict of Markit, which produces the data: "The ‘all-sector’ PMI Output Index, which combines business output and activity measures from the services, manufacturing and construction CIPS/Markit surveys, rose from 54.9 in January to 57.7 in February; its highest reading since August 2007. The improvement in the index more than made up for the
weather-related slowdown seen in January.

"Thus, despite the hit to trade at many business dealt by January’s snow, at 56.3 the average reading for the all-sector Output Index for January and February is above the average of 55.8 seen in Q4. This puts the survey data for Q1 at a level consistent with GDP rising by approximately 0.5% compared to the revised figure of 0.3% recorded in Q4."