World business grows as it faces upcoming risks

Fri Feb 3, 2017 10:36am EST
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By Jonathan Cable

LONDON (Reuters) - Global businesses started 2017 on a solid footing, surveys showed on Friday, thriving ahead of a myriad of political risks in the coming year.

Fears of a growing protectionist agenda in the United States, whether national elections across Europe upset the status quo and just how fractious Britain's divorce proceedings from the European Union become, are all expected to weigh in the months ahead.

Yet so far those risks seem to have been mostly ignored with firms from Asia to Europe to the United States increasing or at least largely maintaining activity.

Euro zone businesses started 2017 by increasing activity at the same multi-year record pace they set in December while the U.S. non-farm payroll report showed job growth surging more than expected in January as construction firms and retailers ramped up hiring.

"Overall while this report is further evidence that the (U.S.) labor market is buoyant the continued slow pace of wage growth means that the (Federal Reserve) will feel under no great pressure to step up the pace of monetary tightening," economists at Lloyds Bank told clients in a note.

China's factory activity grew for a seventh month and while India's services business contracted for a third month as firms struggled to recover from a government crackdown on currency in circulation, the pace slowed.   Continued...

FILE PHOTO: A customer shops in a Casino supermarket in Nice, France, January 16, 2017. REUTERS/Eric Gaillard/File Photo