The global composite index for December rose to 52.6, 0.2 points more than November (52.4). This is the fourteenth month in a row that the global composite has topped 50, signalling business expansion.

The global service index registered 53.8, 0.7 points more than November (53.1). This can be attributed to growth in both new orders (53.6) and new export business (50.3). Employment increased slightly (50.6). Input prices rose again in December, with the rate of inflation remaining high, leading to an increase in output prices.

The best performing nations were India, Spain and US. China and Japan were also among the nations recording expansion. The eurozone economies were among the lower rankings, with Germany, France and Italy experiencing output contraction.

Expansion was driven by the service sector, where business activity rose at the fastest pace in four months as new orders rose to the greatest extent in a year and a half. Manufacturing on the hand had new orders decline for the fifth time in six months.

Global employment edged up slightly. However, for the last five months, employment has remained broadly unchanged.

Input price inflation rose once again in December possibly leading to the rise in output charges.

Business optimism fell to a 3-month low as the slight improvement in the service sector was offset by weaker confidence at manufacturers.

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.