The latest NCB Services PMI release reveals a continuation of the upbeat trends noted of late. The headline Business Activity (56.1) index recorded the sharpest monthly increase in 5 years during October. Activity has now risen in three successive months, led by growth in New Business (56.9, the highest reading since August 2007).
Encouragingly, the improvement in business activity was broad-based, with all four sectors represented in the survey (Business Services, Financial Services, TMT and Transport & Leisure) seeing a pick-up in growth during October. This drove an increase in Employment (53.4, the second successive monthly increase) within the services industry.
We do note, however, that Input Costs (56.9) continued to rise, as they have done for close to two years now, while Output Prices (46.7) remained in deflationary territory. This mismatch represents an ongoing headwind for the sector.
In all, with Expectations (66.2) little changed from September’s 66.6 reading, we would expect to see the overall encouraging trends noted above persist over the remainder of the year, which would represent an impressive performance given the broader economic backdrop.