Services sector boasts further growth

Ireland’s services sector expanded during March, as companies operating in the sector continue to benefit from a recovering economy. However, the sharp fall in the value of the euro during the month contributed to a significant rise in input costs.

According to the latest Services Purchasing Managers’ Index from Investec, March saw further growth in new orders, as the headline PMI reading of 60.9 demonstrates “clear and consistent strong growth”, bringing the current sequence of expansion to 32 consecutive months.

Philip O’Sullivan, chief economist, Investec Ireland, said that the latest survey reveals further expansion of activity in March.

“While the rate of growth implied by the headline PMI moderated for a third successive month to 60.9 (from 61.4 in February), it is consistent with a sharp rate of expansion, with the sequence of above-50 readings now extending to 32 successive months,” he said.

Irish services companies benefited from healthy demand from both domestic and overseas customers, according to Investec, with the New Orders index still well above the series average.

Employment across the services sector continues to be broad-based, Mr O’Sullivan said, with data for the four segments of the services industry – TMT, business services, financial services and travel & leisure -reporting simultaneous growth in headcounts for a sixteenth successive month.

However, the survey also revealed that the impact of the European Central Bank’s quantitative easing programme, aimed at stimulating growth in the euro zone, is somewhat of a double-edged sword. The fall in the value of the euro against Ireland’s largest trading partner, the UK, contributed to a sharp rise in input costs in March, but new orders also grew at a substantial pace with new business from abroad, in particular from the UK.

Looking ahead, Mr O’Sullivan noted that, despite recent slippage, the expectations index remains well above the series average, signalling that services firms remain upbeat on their prospects.

“A tangible sign of this is the ongoing rise in payrolls in the sector. Given these factors, we are confident that further encouraging Services PMI readings will be posted in the coming months.”

Meanwhile, euro zone business activity accelerated in March at its fastest pace for nearly a year as customers took advantage of ongoing price discounting to place new orders at a rate not seen since mid-2011, a survey found.

The upbeat survey will provide welcome news for the European Central Bank just weeks after it embarked on a trillion- euro asset-purchase programme to try and spur growth and inflation.

Markit’s final March Composite PMI, seen as a good indicator of growth, stood at 54.0, a touch below the preliminary estimate of 54.1 but well ahead of February’s 53.3. A reading above 50 implies growth.

“The PMIs are indicating somewhat sluggish GDP growth of 0.3 per cent for the first quarter. However, the important message from the survey data is that the pace of expansion looks set to gather pace in coming months,” said Chris Williamson, Markit’s chief economist.

A sub-index measuring new orders leapt to 54.1 from 52.5, its highest since May 2011. That suggests a healthier outlook although the survey also showed companies have now been cutting prices for three years, although not as sharply in March.

Euro zone downturn becoming entrenched – PMIs – Reuters UK

LONDON (Reuters) – The downturn in the euro zone’s private sector is becoming entrenched … which has been falling at an increased rate, through to Germany. It is becoming deeper and more broad-based,” said Chris Williamson, chief economist …

Fixed Mortgage Rates Hit New Lows On Euro-Zone Fears – Wall Street Journal


Fixed Mortgage Rates Hit New Lows On Euro-Zone Fears
Wall Street Journal
a decline that put the 30-year fixed mortgage rate at an all-time trough for the fifth straight week. Freddie Mac Chief Economist Frank Nothaft pointed to resurgent worries over the euro zone's sovereign-debt crisis as cause for the latest decline.
US 30-year mortgage rate falls to record 3.75 pct.WBRC

all 343 news articles »

Norway Ctrl Bk Talks Down NOK,Sees Narrow Exit For Investors – Wall Street Journal


Norway Ctrl Bk Talks Down NOK,Sees Narrow Exit For Investors
Wall Street Journal
The EUR/NOK traded higher following the Governor's comments, at 7.5233, from 7.5046 at the close Monday. The currency move is also related to a strengthening euro and a somewhat weaker oil price, Chief Economist Harald Magnus Andreassen of Swedbank
Nordic Currencies Stung in Crisis as Ingves Reverses PolicyBusinessWeek

all 11 news articles »

Euro zone private sector grows – Irish Times

but also that the rate of decline in the periphery has started to ease quite substantially,” said Chris Williamson, chief economist at Markit. Despite the firmer outlook from the latest set of PMIs, Mr Williamson warned much still hinges on how the euro …

Money Flows, but What Euro Zone Lacks Is Glue – New York Times

“It’s not a funding problem.” Yet, with even German interest rates rising, the markets are now worried about the sustainability of the euro zone as a whole, said Simon Johnson, a former chief economist for the International Monetary Fund …

US Stock Futures Higher; Speculation Of Possible ECB Rate Cut – Wall Street Journal

ABC Online

US Stock Futures Higher; Speculation Of Possible ECB Rate Cut
Wall Street Journal
Steen Jakobsen, chief economist at Saxo Bank, said markets were boosted by unconfirmed speculation about a possible interest-rate cut by the European Central Bank as well as hopes that a solution will be found to the euro-zone debt crisis.
Euro Hopes Lift Global MarketsFox Business
Bank stocks up on hopes of ECB interest rate cutIrish Times
Stocks Advance on Europe Optimism as Treasuries, Dollar RetreatSan Francisco Chronicle
Fox News –RTT News
all 1,309 news articles »

Federal Reserve Seen Raising Rates, Boosting Dollar In 1Q ’12-Zandi – Wall Street Journal


Federal Reserve Seen Raising Rates, Boosting Dollar In 1Q '12-Zandi
Wall Street Journal
CHARLOTTE (Dow Jones)–The Federal Reserve is likely to start raising interest rates in the first quarter of next year, strengthening the dollar against the Euro into 2012, Moody's Analytics chief economist Mark Zandi said Friday.
FOREX-Dollar rallies as jobs data fuels Fed policy talkReuters
Dollar in Longest Gain Streak Versus Yen Since 2005 on Stronger Jobs DataBloomberg
Dollar Gains Versus Yen Most in a Year as Jobs Signal GrowthBusinessWeek
MarketWatch –Zawya –Financial Times
all 271 news articles »

Euro Productivity May Outpace U.S. in 2011, Research Group – Bloomberg

The euro area’s rate will slip to 1.3 percent from 1.6 percent. “U.S. productivity growth will be tempered briefly in 2011 as employment recovers from its major recession cutbacks, but that’s temporary,” said Bart van Ark, chief economist at the …