U.S. services companies reported slower growth last month and Asian economies recorded robust expansion, while Europe worsened amid rising coronavirus cases and fresh pandemic restrictions, according to purchasing-managers surveys.
Data firm IHS Markit said Wednesday that its U.S. services index was 54.8, the slowest growth in three months and down from 58.4 the prior month. A reading above 50 indicates growth, while a level below 50 signals contraction.
“Rising virus case numbers took an increasing toll on the U.S. economy in December, with business activity, order books and employment all growing at much reduced rates,” said Chris Williamson, IHS Markit’s chief business economist. “The slowdown was especially steep in the service sector, where stricter social distancing measures hit consumer-facing businesses.”
By contrast, manufacturers across the globe recorded a faster rise in output as the year drew to a close. Factories in the U.S., Asia and Europe increased output, as a revival in trade boosted new orders.
The resilience of the global manufacturing sector contrasted with weakness in services businesses that rely on close physical proximity. Rising numbers of Covid-19 infections this fall and winter have led governments to impose fresh restrictions, including lockdowns in Europe.