Businesses see mild improvement in operating conditions in December: Nikkei Singapore PMI

Tim Moore, senior economist at Markit, said: “UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November’s seven-month low”.

It is important to state that a separate survey released last week showed that factory activity ticked up slightly from its lowest level in three years but continued to show signs of contraction.

December’s incessant rainfall in Chennai impacted heavily on the sector, with fall in new work leading the companies to scale back output at the sharpest pace since February 2009, the survey said.

A private Chinese services gauge slumped to the second-lowest reading since the series began a decade ago and close to a level signaling contraction, suggesting conditions may be weaker than the government’s official index indicates.

The Nikkei/Markit Services Purchasing Managers’ Index surged to 53.6 in December from November’s 50.1, its fastest pace in 10 months.

Manufacturing activity in the electronics sector also contracted in December, with the PMI coming in at 48.9, a slight dip from November’s 49.0. A stronger services sector is a saving grace and is providing a cushion to the economy.

On the other hand, goods producers hired additional staff, but the rate of job creation was only marginal.

Caixin’s subindex measuring production fell for the seventh time in eight months, driven by a decline in new orders, which are seen as an indicator of overall demand.

“The PMI data show that the recovery in Italy’s economy has moved up a gear in the final quarter and has solid momentum heading into the new year”, said Markit economist Phil Smith.

“Cost inflation continues to surpass charge inflation, highlighting the intense competitive environment”, added De Lima. Taken together, the sectors’ combined employment environment deteriorated for the seventh month in a row in December.