Services business slowed in China in October, shrank in India and approached stall speed in Britain, suggesting the global economy is weakening just as the euro zone debt crisis reaches a critical stage.
The key surveys were released today as G20 leaders met in Cannes, where they will discuss the crisis, and as the political crisis in Greece deepens with the country's government and future as a euro zone member in doubt.
The official China services purchasing managers' index showed slower growth in October, while India's services PMI slipped to its weakest since the 2008-09 financial crisis.
There is no real concern yet that these economies, which have helped drive global growth in recent years, will slip into recession as growth rates remain very high. But that is not the case for the developed world.
Britain's dominant service sector grew at a far slower pace than expected in October, a sign that the faltering economy now faces a serious threat of contraction in the final quarter this year and could even slip back into recession.
Global factory activity is also slowing, according to similar reports earlier this week.
The latest evidence on services business in Britain, however, suggests the economy is barely growing. The UK Markit/CIPS services PMI slumped to 51.3 in October from 52.9, below consensus expectations.
The slump in the euro zone, Britain's main trading partner, is partly responsible, as is the prospect of hundreds of thousands of job losses in the public sector and cuts to spending to address a bloated UK budget deficit.
In China, the situation is much more upbeat. China's official PMI, from the China Federation of Logistics and Purchasing, fell to 57.7 in October from 59.3 in September, with new orders also slowing slightly.
This survey, which is skewed towards big businesses, showed China's consumer-related service sectors remain stable, but investment-related sectors such as engineering and construction were particularly weak.
The HSBC PMI, which focuses more on smaller-to-medium sized businesses in China, rose to 54.1 in October, above September's 53 and its highest level since June, as new orders picked up for a second successive month.
Input costs also remain elevated, according to the PMIs, underscoring the inflation challenge policymakers in developing economies are grappling with even as some of them start to shift their focus towards growth.
Wages and fuel prices rose sharply in India, today's survey showed. Wholesale inflation, India's official inflation gauge, has been above 9% for almost a year. India's central bank raised interest rates last week for the 13th time since early last year. But it said the chances of another rate rise at its next review in December were relatively low because it expected inflation to fall.
In China, consumer inflation has eased from a near three-year high in July of 6.5%. Beijing has maintained that tackling inflation is its main policy priority but it has also shown some concern about the risks to growth.
