The global composite index for August rose to 52.8, 0.3 points more than July (52.5). This is the 10th month in a role that the global composite is above 50, signalling business expansion.

Growth in output was due to an increase in new business, up 0.3 from July (51.8). Except for the UK, Canada and Kazakhstan, all nations surveyed had their service sector outperform manufacturing in August. Employment fell while input costs and output charges both increased, albeit at a slower pace than in July.

The global service index rose to 53.8, 0.5 points higher than July (53.3) and extending a 19-month streak of expansion. This can be attributed to an increase in both new orders and new export business. Employment remained unchanged while input prices rose again in August, with the rate of inflation remaining high, leading to an increase in output prices.

Firms remain optimistic, expecting growth in the coming year however positive sentiment is at its weakest so far in 2024.

JP Morgan Global Services PMI gives an overview of the global services sector. It is based on monthly surveys of over 5,500 executives from 15 of the world’s strongest economies, including the U.S., Japan, Germany, France and China which together account for nearly 80 percent of global services sector’s gross value added (GWA). It reflects changes in global output, employment, new business, backlogs and prices. The Global Services PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit in association with ISM and the International Federation of Purchasing and supply Management (IFPSM).

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. The J.P. Morgan Global Services PMI provides advance insight into the global services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of global markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The JP Morgan Global Services PMI data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the services sector accounts for the lion’s share of GDP of many advanced economies, this report has a big influence on the markets. In addition, its sub-indexes provide a picture of global output, employment, new business, backlogs and prices.