Euro zone service sector activity falls sharply in November UK posts growth

Euro zone service sector activity fell sharply in November due to lower service level activity across the region. The euro zone services Purchasing Managers' Index (PMI), an important parameter to judge the activity, stood at 47 in November compared to 46.5 in October. Any reading lower than 50 indicates contraction. The drop in service sector activity was due to lower service demand amid the current debt crisis and uncertainty of global economy.

Spain-s PMI dropped to the record low of 36.8 in November compared to 41.8 in October. This much severe contraction in service sector activity will intensity slowdown in the country which is already struggling with record high unemployment rate. At the same time France, Italy and Germany has reported the contraction in service sector activity but it was better than previous month.

While the entire euro zone is struggling, UK PMI has posted decent growth in the same month. UK-s Markit services purchasing managers' index (PMI) stood at 52.1 in November compared to 51.3 in October. 52.1 is comfortably higher than 50 and indicates decent growth in the service sector activity. As the service sector activity accounts for more than 65% of UK GDP, with this growth UK-s GDP is expected to post decent growth for the current quarter.