Services PMI's in Europe continue to impress

Frankfort (Dec 3)  This morning has been a busy one data-wise in Europe. In general most of the data missed analyst expectations but in fairness, the numbers are not too bad. Let us start with the Eurozone services PMI number. For November the service sector remained in expansionary territory. The report noted, overall, the rate of expansion was solid and remained above its historical average, primarily reflecting resilience in the service sector as manufacturers were heavily impeded by severe supply-related constraints.

Chris Williamson, Chief Business Economist at IHS Markit said “Growth is looking especially subdued in Germany and France, where supply shortages have had a notably stronger knock-on effect from manufacturing through to services. More resilient expansions are being recorded in Spain and Italy, though even here recent gains are at risk if social distancing restrictions need to be stepped up."

In the U.K., the service sector also improved and this came despite the rise in inflation. Prices charged by service providers also increased at the fastest rate since the survey began in July 1996. New business growth accelerated for the second month
running in November and was the strongest since June. Twice as many survey respondents (32%) signalled a rise in new orders as those that reported a decline (16%).

Tim Moore, Economics Director at IHS Markit said “Surging price pressures have done little to dent business and consumer spending across the UK economy, according to the latest PMI data. New order growth hit a five-month high in November, job creation remained strong, and backlogs of work built up due to supply issues."

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