Service providers expect their workloads to escalate in 2017

Markit’s preliminary reading on service-sector activity in December showed a slowdown, even as job creation surged.

The flash purchasing manager’s index (PMI) fell to 53.4 from a November reading of 54.6. Economists had forecast an increase to 55.2.

“The December slowdown looks likely to be a temporary blip, not least because firms took on staff in increasing numbers in the expectation of rising workloads in 2017,” said Chris Williamson, the chief business economist at IHS Markit.

The pace of job creation in the most active part of the US economy slowed to a nine-month low, Markit said.

Service providers last month said new orders came in at the best rate in a year. Their clients became more willing to spend after the election, since their uncertainty about who would win was gone.

“With the new year bringing a change of government and a shift in emphasis towards fiscal stimulus, economic growth and the labour market look set to strengthen further in 2017.”

Purchasing managers reported that the costs of raw materials and food jumped at a rate they had not seen since July last year.

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