The HSBC Markit Purchasing Managers’ Index (PMI) for December 2013 (Combined Services + Manufacturing) came in at 48, which indicates a continued contraction. (Anything less than 50 is contraction and more than 50 is expansion).

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Earlier, the Manufacturing Index had come in at 50.7 which was marginally lower but still expanding.

Four of the six broad areas of the service economy registered lower output volumes, while new business contracted in five categories. As with the trend for
output, the sharpest decline in new orders was noted at Hotels & Restaurants. The Post & Telecommunication sub-sector remained resilient, with growth of both business activity and new orders recorded.

However they note that the rate of price inflation was low and business was generally upbeat about 2014.

These numbers don’t look great for the last quarter, but optimism means that people aren’t entirely disheartened. Still, a downturn isn’t complete until most, if not all, optimism dies – and we are likely to see more ups and then more deeper downs before things pick up.

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