The service sector PMI rose to 53.7 in October from 53.3 in September.
The service PMI has been very volatile during the last year and is therefore somewhat tricky to interpret. But the PMI has now been well above the 50-mark for four consecutive months. Coupled with the improvement seen in the NIER´s confidence indicators for the service sector, it seems like growth in is gearing up in the sector. GDP in all likelihood bottomed in Q2 2013 and is now gradually gaining momentum. But the service PMI numbers do not indicate a booming economy.
The uptick in new orders to a high 54.6 also suggests that the service PMI may stay at decent levels also in the coming months. The sub-index for employment however fell to 50.8, which in the past has been consistent with mediocre employment growth of around 0.5% y/y.
All in all nothing surprising and no market effects are expected on the back of this number.
Details October:
Service sector PMI: 53.7 (prior 53.3)
Employment: 50.8 (prior 52.4)
New orders: 54.6 (prior 54.0)
Order books: 51.2 (prior 52.7)
Business volume: 56.0 (prior 55.4)
Planned business volume: 62.7 (prior 62.8)
Nordea