Global| Nov 03 2010UK Services Sector Shows Some Life-Is It Real?
Summary
The UK service sector diffusion index has risen to 53.19 in October from 52.80 in September. The index is not particularly strong, standing only in the 64th percentile of its range. Earlier this month the EU indices showed that the [...]
The UK service sector diffusion index has risen to 53.19 in October from 52.80 in September. The index is not particularly
strong, standing only in the 64th percentile of its range. Earlier this month the EU indices showed that the EU-wide
service sector measured on a different diffusion format stood at the 61st percentile of this range. Thus the
UK is about in the same circumstance as the rest of the EU on average as far as its service sector is concerned.
Services are off peak even with respect to their best level in the recovery period as the chart above documents. Construction and MFG also have pulled back. This is a feature shared by EMU nations where services and MFG both have pulled back from previously higher readings in this every expansion. Against that background the rise in services index this month raises a question mark instead of making an exclamation point.
The UK has shown some life in October but it is unclear if this rebound will have staying power. The rest of the EU region is still struggling. Services and consumer confidence in the Zone were flat in October in the earlier EU Commission report. In September Spain continues to see unemployment rising. Spain’s unemployment rate is double the EU average and still eroding. Austerity remains the name of the game in Europe. Despite UK’s bounce in the service sector in October the future remains a question mark.
| Various Looks at the UK, EU and EMU Services Sector | |||||||
|---|---|---|---|---|---|---|---|
| Oct-10 | Sept-10 | Aug-10 | 3Mo | 6Mo | 12Mo | Percentile | |
| UK (CIPs) | 53.19 | 52.80 | 51.33 | 52.44 | 53.36 | 54.86 | 64.0% |
| EU Commission Indices for EU and EMU | |||||||
| EU Index | Oct-10 | Sept-10 | Aug-10 | 3Mo | 6Mo | 12Mo | Percentile |
| EU Services | 5 | 5 | 5 | -11.00 | -13.67 | -15.00 | 65.7% |
| EMU | Oct-10 | Sept-10 | Aug-10 | 3Mo | 6Mo | 12Mo | Percentile |
| Services | 8 | 8 | 7 | 7.67 | 6.33 | 2.42 | 61.1% |
| Cons Confidence | -11 | -11 | -11 | -11.00 | -13.67 | -3.39 | 65.7% |
| Consumer Confidence by Country | |||||||
| Germany-Ccon | 7 | 5 | 3 | 5.00 | -0.67 | -7.83 | 93.0% |
| France-Ccon | -17 | -18 | -18 | -17.67 | -19.67 | -18.83 | 50.0% |
| Ital-Ccon | -22 | -22 | -21 | -21.67 | -22.00 | -20.58 | 28.6% |
| UK-Ccon | -16 | -17 | -13 | -15.33 | -14.00 | -10.00 | 50.0% |
| percentile is over range since May 2000 | |||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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