In July, services activity accelerated. At 60.2, the CIPS activity index reached its highest level since December 2006. This good news comes on top of better prospects for manufacturing and construction sectors. Overall, the PMI composite index improved further.
■ In July, services activity once more accelerated according to the CIPS Markit survey. The CIPS services activity index rose (to 60.2 from 56.9 in June) and even reached its highest level since December 2006.
■ Moreover the improvements of the components to which normally lead the cycle were especially encouraging. Both new business index and business expectations index further increased from June to July. The incoming new business index, up by 0.8 point, consolidated its previous increases, and reached its highest level since the November 2006 (to 60, after 59.3). The employment index slightly decreased (from 53.7 to 53.6). However this pause came after several increases, and the index was above the 50-threshold for the seventh month in a row (to 53.6, after 53.7 in June). Employment is thus likely to support household’s confidence and spending this summer. Finally the services PMI composite, above the 50-threshold for the seventh month in a row (at 57.1, up from 55.8 in June), reached its highest level more than six years.
■ These data are consistent with the EC survey. After having sharply increased in the second quarter of 2013 (+0.6% q/q), activity in services (more than 75% of Gross value added) may increase further in Q3 2013 if this improvement is confirmed over the next months. This is particularly a good news as additionally, the performance of manufacturing and construction sectors may show an improvement in Q3 in comparison with Q2 (respectively 0.4% q/q and +1% q/q in Q2). Indeed the PMI indices for activity were up in these sectors in July (respectively to 58 and 57 after 55.5 and 51 in June). Overall, the PMI composite index for activity, up by 3.1 points (to 59.8), reached its highest level since the start of the survey in January 1998. GDP, up by 0.6% q/q in Q2 2013, is set to keep growing. All these data are impressive but there may be correction the next month as the weakness of the euro-zone economy, the UK’s main trading partner (45% of exports), as well as the global economic conditions still weigh on the economy.
BY Catherine STEPHAN
To Read the Entire Report Please Click on the pdf File Below.
■ In July, services activity once more accelerated according to the CIPS Markit survey. The CIPS services activity index rose (to 60.2 from 56.9 in June) and even reached its highest level since December 2006.
■ Moreover the improvements of the components to which normally lead the cycle were especially encouraging. Both new business index and business expectations index further increased from June to July. The incoming new business index, up by 0.8 point, consolidated its previous increases, and reached its highest level since the November 2006 (to 60, after 59.3). The employment index slightly decreased (from 53.7 to 53.6). However this pause came after several increases, and the index was above the 50-threshold for the seventh month in a row (to 53.6, after 53.7 in June). Employment is thus likely to support household’s confidence and spending this summer. Finally the services PMI composite, above the 50-threshold for the seventh month in a row (at 57.1, up from 55.8 in June), reached its highest level more than six years.
■ These data are consistent with the EC survey. After having sharply increased in the second quarter of 2013 (+0.6% q/q), activity in services (more than 75% of Gross value added) may increase further in Q3 2013 if this improvement is confirmed over the next months. This is particularly a good news as additionally, the performance of manufacturing and construction sectors may show an improvement in Q3 in comparison with Q2 (respectively 0.4% q/q and +1% q/q in Q2). Indeed the PMI indices for activity were up in these sectors in July (respectively to 58 and 57 after 55.5 and 51 in June). Overall, the PMI composite index for activity, up by 3.1 points (to 59.8), reached its highest level since the start of the survey in January 1998. GDP, up by 0.6% q/q in Q2 2013, is set to keep growing. All these data are impressive but there may be correction the next month as the weakness of the euro-zone economy, the UK’s main trading partner (45% of exports), as well as the global economic conditions still weigh on the economy.
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BY Catherine STEPHAN
To Read the Entire Report Please Click on the pdf File Below.
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