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US services PMI pending

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US services PMI pending

Business activity in the US service economy accelerated further in April, according to a broad consensus of market analysts eyeing Friday’s PMI report.

Markit Group’s services PMI is expected to rise from 55.3 to 56 this month, experts say. The broad gauge of service activity rose 2 percentage points in March as business activity accelerated for the fifth consecutive month. Underlying risks remained, however, as new orders expanded at the slowest rate since September 2012.

A PMI reading above 50 is seen as a general sign of expansion in service activity A reading below that level denotes contraction.

The market research firm announced Wednesday the manufacturing industry continued to expand this month, led by the fastest rise in factory production in more than three years. Domestic demand continues to do most of the heavy lifting, supporting employment growth for the tenth month running.

The domestic-led upturn is likely to translate into stronger business activity for service providers, who worked through a steady stream of backlogs last month. However, softer growth in new orders raised warning signs for investors who are still trying to gauge the status of US recovery following the winter.

Combined with manufacturing PMI, the services gauge could set the tone for the second quarter. The weather-related slowdown in the first quarter is believed to have weighed heavily on national gross domestic product. US GDP expanded a mere 1.5 percent in the first three months of the year, according to several market voices.

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