Economy

GST impact: Services PMI hit three-month low in November, Nomura 'surprised'

GST impact: Services PMI hit three-month low in November, Nomura 'surprised'

Spain's service sector grew in November at a slightly slower pace than a month earlier, as new business creation eased and uncertainty over the situation in Catalonia appeared to weigh on demand, a survey showed on Tuesday.

"Reflecting a slowdown in output growth, the Nikkei Composite Output Index fell from 51.3 in October to a three-month low of 50.3 in November", the Nikkei report said. A reading below 50 mark means contraction while, above that indicates expansion, reported Reuters.

The Caixin China General Manufacturing Purchasing Managers' Index, released on Friday, dipped to 50.8 in November from 51 in October on slower growth in new orders, while companies' confidence in the business outlook sank to a record low.

- Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.

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Click here for enlarge

It was the highest reading in five months, with house building projects again emerging as the "primary growth engine" for industry activity. However other sectors, including financial services and travel & leisure experienced a faster pace of growth.

A survey of manufacturers last week also suggested input costs remained high, fueled by China's government's tougher pollution measures in a battle against thick winter smog.

Cost pressures "further intensified at service firms - fastest inflation since October 2013", said Aashna Dodhia, economist at IHS Markit, which compiles the survey.

"The Caixin PMI readings in November showed the economy has maintained stability, and there was no imminent risk of a significant decline in the growth rate", said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.

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