Global services sector growth drops to 14-month low: JP Morgan survey

Global service sector growth continued to slow in December with the business activity growth easing to its weakest since October 2013 as the pace of new orders hit a 20-month low, according to the latest JP Morgan survey.

The JP Morgan global services PMI fell to a 14-month low of 52.3 in December from 53.4 in November. The index nonetheless signalled output growth for the 27th straight month, JP Morgan said.

"The weaker trend in new order growth and a slight dip in business optimism suggest that any early 2015 bounce in growth will be only marginal at best," said David Hensley, director of global economics coordination at JP Morgan.

Overall, the year 2014 was positive for the sector despite the slowdown at the end of year, with average rates of expansion at its strongest since 2010, the survey showed.

JP Morgan said Ireland and the UK were at the top of the global services business activity growth rankings in December. Irish output rose at the fastest pace since June, but growth in the UK slipped to a 19-month low.

Meanwhile, the US service sector activity growth decelerated for the sixth straight month to its lowest since February. The eurozone output ticked slightly higher but remained below the US figure.

There were slight increases in activity in Japan, China, India and Hong Kong, in contrast to the slight contraction in Brazil and deep downturn in Russia, JP Morgan said.

Employment rose for the 58th successive month in December, albeit at the weakest pace since April. Job creation was seen in the US, Eurozone, Japan, China, the UK, Brazil and India.

Average output prices rose negligibly during December, the joint-weakest increase during the current one-and-a-half year sequence of gains. Input price inflation remained relatively subdued.