Service Sector Activity Accelerated in the U.S. but Slowed in Euroland Last Month

June 3, 2011

U.S. service sector activity partly recovered in May according to the purchasing manager survey after a sharp slowdown in April.  In Euroland, however, there was a slower pace of positive growth in May with only marginally rising activity in Ireland, Spain and Italy.  The U.S. minus Euroland PMI spread for services therefore narrowed by 2.5 points to mius 1.4.  This move brought into greater balance between manufacturing and non-manufacturing the shift that has occurred in Europe’s favor since January.  Over those four months between January and May, the manufacturing spread fell 4.6 points from +3.5 to –1.1, and the services spread dropped 3.1 points from +3.5 to –1.4.  The sum of the two spreads shown in the right-most column now stands at minus 2.5 compared to +7.0 in January.

America’s improvement in services last month was spearheaded by gains of 4.1 points in orders and 2.1 points in jobs.  Euroland’s deterioration was led by Germany’s drop from 57.8 to 56.1 and Italy’s decline from 52.2 in April to a reading of 50.1 in May.

PMIs U.S. Ezone   U.S. Ezone   Sum of
  Services Services Spread Mf’g Mf’g Spread Spreads
Feb 2009 42.1 39.2 +2.9 35.7 33.5 +2.2 +5.1
March 41.2 40.9 +0.3 36.4 33.9 +2.5 +2.8
April 43.9 43.8 +0.1 40.4 36.8 +3.6 +3.7
May 44.5 44.8 -0.3 43.2 40.7 +2.5 +2.2
June 46.3 44.7 +1.6 45.3 42.6 +2.7 +4.3
July 46.7 45.7 +1.0 49.1 46.3 +2.8 +3.8
August 48.2 49.9 -1.7 52.8 48.2 +4.6 +2.9
Sept 50.1 50.9 -0.8 52.4 49.3 +3.1 +2.3
October 50.1 52.6 -2.5 55.2 50.7 +4.5 +2.0
November 48.4 53.0 -4.6 53.7 51.2 +2.5 -2.1
December 49.8 53.6 -3.8 54.9 51.6 +3.3 -0.5
Jan 2010 50.5 52.5 -2.0 58.4 52.4 +6.0 +4.0
Feb 52.7 51.8 +0.9 57.1 54.2 +2.9 +3.8
March 54.1 54.1 0.0 60.4 56.6 +3.8 +3.8
April 54.6 55.6 -1.0 59.6 57.6 +2.0 +1.0
May 54.8 56.2 -1.4 57.8 55.8 +2.0 +0.6
June 53.5 55.5 -2.0 55.3 55.6 -0.3 -2.3
July 53.7 55.8 -2.1 55.1 56.7 -1.6 -3.7
August 52.8 55.9 -3.0 55.2 55.1 +0.1 -2.9
Sept 53.9 54.1 -0.2 55.3 53.7 -0.4 -0.6
October 54.6 53.3 +1.3 56.9 54.6 +2.3 +3.6
November 56.0 55.4 +0.6 58.2 55.3 +2.9 +3.5
December 57.1 54.2 +2.9 58.5 57.1 +1.4 +4.3
Jan 2011 59.4 55.9 +3.5 60.8 57.3 +3.5 +7.0
Feb 59.7 56.8 +2.9 61.4 59.0 +2.4 +5.3
March 57.3 57.2 +0.1 61.2 57.5 +3.7 +3.8
April 52.8 56.7 -3.9 60.4 58.0 +2.4 -1.5
May 54.6 56.0 -1.4 53.5 54.6 -1.1 -2.5

Copyright 2011 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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