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Prospects daily: Non-manufacturing growth in U.S. stable in April

Global Macroeconomics Team's picture

Important developments today:

1. U.S. service sector growth flat in April

2. Euro Zone PMIs continue to grow

3. Indonesia keeps key interest rate unchanged


U.S. non-manufacturing sector growth flat in April The Institute of Supply Management’s index of activity in the U.S. service sector, which covers almost 90% of non-manufacturing activity, remained unchanged from March at a level of 55.4 in April. Median market expectations were for an index reading of 56, which would have indicated the fastest pace of expansion in the sector in 4 years (any index level above 50 separates contraction from expansion in the sector).


Source: Institute for Supply Management


Euro-Zone PMIs continue to grow… The Euro-Zone services sector expanded at the fastest pace in April since October 2007, according to the final reading of Markit Economics’ Purchasing Managers Index (PMI). The non-manufacturing PMI climbed to 55.6 in April, slightly higher than the flash estimate of 55.5 recorded earlier in the month. The service sector data echoes the results of the manufacturing survey released earlier this week, and highlights the French and German economies as the leaders of the European economic recovery.

Among emerging markets:

In East Asia and Pacific, Indonesia’s central bank kept its key interest rate to a record low of 6.5%, for a ninth straight month as an appreciating rupiah kept inflation in check at below 4%.

In Central and Eastern Europe and the CIS, The European Commission revised up its growth forecast for Poland and Slovak Republic to 2.7%, marking the fastest growth in the EU, on export growth and investment. The Czech Republic is projected to expand 1.6% and Hungary’s economy is expected to stagnate. Germany the largest economy in the EU is expected to grow 1.2%. Romania’s GDP is projected to grow 0.8%.

In Sub-Saharan Africa, Nigeria’s central bank expects economic growth of about 7% this year, according to Governor Lamido Sanusi. South Africa’s investors’ confidence rose to the highest since 2007 in the first quarter. The Maxim-ETM index rose to 105.9 from a revised 94.4 in the fourth quarter.