Markit Services PMI: "Business Activity Growth Accelerates To Five Month High In December"

The December US Services Purchasing Managers' Index conducted by Markit came in at 52.8 percent, up 1.2 from the final November estimate of 51.6. The Investing.com consensus was for 52.2 percent.

Here is the opening from the latest press release:

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

Business activity in the vast service sector picked up pace at the end of last year as rising domestic demand and signs of reviving exports led to higher workloads. Combined with indications of manufacturing lifting out of it’s recent lull, the survey data suggest the overall pace of economic growth accelerated to its fastest since last April.

"However, while moving in the right direction, service sector growth remains well below that seen in the early months of 2019, and the overall survey results are indicative of GDP rising at a relatively modest annual rate of 1.8% in December.

"The missing ingredient compared to this time last year is optimism about the future, with business sentiment regarding prospects for the next twelve months running well below levels seen this time last year, and close to the lowest for at least seven years. Indeed, much of the recent improvement in demand has come from stronger sales to consumers, with business spending and investment remaining under pressure amid this anxiety about the economic and political outlook." [Press Release]

Here is a snapshot of the series since mid-2012.

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Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management, which they refer to as "Non-Manufacturing" (see our full article on this series here). Over the past year, the ISM metric has been significantly the more volatile of the two.

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The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend. Since early in 2016, the ISM metric has shown stronger growth than the Markit counterpart.

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Both series weakened since 2015 and saw an uptick in the latter half of 2016. The interim three-month moving average of the Markit Services index peaked in August of 2014. The ISM index peaked in September of 2015. The two were fairly closely aligned at the beginning of 2016, but they diverged early with the Markit index signaling noticeably weaker growth.