Weak Trend in Consumer Services Continues, Reflecting Declines in US and Asia
February 11, 2016 | MarkitEstimated reading time: 1 minute
Key points:
- Real estate and insurance drive growth within financials
- Weak trend in consumer services continues, reflecting declines in US and Asia
- Basic materials output continues to fall
The first batch of Markit’s detailed sector PMI data for 2016 revealed that financials continued to lead global growth in January. The financials sector, encompassing banks, real estate, insurance and other financial services, has topped the growth rankings four times in the past five months. That said, the rate of growth eased to a five-month low in the latest period, and new business also rose more slowly.
Within financials, growth was fastest in the real estate and insurance sectors. Real estate also topped the rankings for 23 detailed sectors monitored. Banks registered only a modest increase in activity, however, while other financials posted a slight decline and was ranked twentieth out of 23 detailed sectors.
Telecommunication services and technology were a close second and third respectively in terms of output growth in January. Consumer goods also posted a robust rise in output, and saw the fastest growth of new orders among the seven major sector groups monitored. In contrast, consumer services registered only a weak increase in activity. This reflected declines in both Asia and the US. Basic materials remained the only broad sector group to record declining output in January.
Drilling down to a more detailed level, service sectors occupied four of the top five rankings in January, led by real estate. Insurance was ranked fourth overall, and posted the strongest rise in new business of all 23 sectors monitored.
Food was the highest-ranked manufacturing sector, placing second in the overall growth table. The next-fastest growing manufacturing sectors were forestry & paper products and technology equipment, in sixth and eighth respectively.
Beverages posted a decline in output in January, displacing metals & mining at the foot of the sector league table. That said, new orders continued to rise, suggesting the downturn in production will prove short-lived.
Metals & mining output declined for the twelfth month in a row in January, and at the secondfastest pace over this sequence. Moreover, new orders in the sector fell for the fifteenth successive month. Two further sectors registered lower output at the start of 2016, namely tourism & recreation and other financials.
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