United Kingdom service sector growth rises amid doubts

Moderation in fuel price rises is though to be behind the statistic

Moderation in fuel price rises is though to be behind the statistic

A surge in manufacturing productivity across all major European economies, along with accelerated services, contributed to IHS Markit's Final Composite Purchasing Managers' Index increasing to 58.1 in December.

The headline PMI for eurozone services rose to 56.6 in December, up from 56.2 in November and beating the earlier flash estimate of 56.5.

The index also remained above the 50 threshold that separates contraction from expansion for the 16th month in a row. Growth momentum was the strongest in Ireland with France coming second, while activity in Germany reached its highest level in nearly seven years. Outstanding business expanded for the nineteenth-straight month.

Economic activity in the euro-area accelerated to the fastest pace in nearly seven years as services surged while factories benefited from booming domestic demand and near-record growth in export orders. "This outlook was shared by the manufacturing community as sentiment picked up to the strongest in three months amid expected improvements in market conditions over the next 12 months", she added.

The private sector in Singapore continued to expand in December, albeit at a much slower pace, the latest survey from Nikkei showed on Thursday with a PMI score of 52.1.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "The construction sector ended 2017 on a weak note, and it likely will continue to struggle in 2018".

Input price inflation jumped to reach the highest level since September, continuing the squeeze on margins particularly for fuel, after recent oil price rises, and utility bills.

"While a pick-up in new orders to a seven-month high in December offers some hope for construction going into 2018, it looks like it is going to be another challenging year for the sector".

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