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Economy in Brief

Euro-Zone Services Activity Picks Up in May
by Carol Stone June 3, 2004

The Euro-Zone Purchasing Managers Index for the service industries gained 1.22 points last month. Employment, new business and expectations all contributed, while outstanding business slowed. These international PMI surveys are conducted by NTC-Research for Reuters, Inc.

Among the individual countries, France jumped 3.5 points, regaining the more buoyant amounts that prevailed around the turn of this year. Every component of the French index advanced. Italy's index also increased, that in Germany was basically flat and in Spain, down about a point.

Separate measures in the UK and Russia were mixed. The UK's index slowed, but maintained a favorable pace. Employment rose while new and outstanding business eased. Services activity in Russia, in its index compiled by Moscow Narodny Bank, gained somewhat with increases in new and outstanding business. The overall pace, however, remains well below levels during the second half of 2003.

A widespread characteristic of this month's service sector activity was faster rising prices. Input prices were up sharply in Germany, France, Spain and the UK; they rose modestly in Italy and were steady in Russia. Prices charged accelerated in France and the UK. They picked up in Italy and Germany, although at just under 49%, these prices are still falling, though more slowly than before. Price increases decelerated in Spain and Russia.

Purchasing Managers Index Percent
(>50 = expansion; 
<50 = contraction)
May 2004 Apr 2004 Mar 2004 May 2003 2003 2002 2001
Euro Zone Total 55.76 54.54 54.40 47.89 51.36 51.58 51.63
  Employment 49.98 49.53 49.26 45.64 46.91 49.35 52.48
  New Business 54.63 53.60 53.58 45.62 50.85 51.24 50.11
  Business Expectations 66.05 64.24 66.07 61.86 65.09 65.74 62.08
Germany 53.60 53.30 53.16 44.38 48.49 48.62 48.87
France 58.52 55.04 55.86 50.99 53.99 54.71 54.26
Italy 56.85 55.83 55.18 50.10 53.34 52.97 53.91
Spain 54.63 55.67 53.90 50.39 52.51 52.57 51.64
United Kingdom 57.40 58.99 58.74 51.86 54.84 54.37 51.41
Russia 60.00 59.43 55.84 61.82 61.84 58.08 61.20
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