Afternoon Coffee: US Service Sector Grows Slightly in April, Execs Optimistic About 2016 M&A Activity

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The U.S. service sector saw only modest growth in April, with the Markit Flash U.S. Services PMI Business Activity Index increasing to 52.1 compared to the 51.3 in March. “Subdued” client demand and less than ideal economic conditions reportedly contributed to the weaker growth.

EY's new Global Capital Confidence Barometer showed 57% of companies that responded to a survey said they are planning to pursue an acquisition over the next year, and about 48% are planning to develop alliances with competitors or industry peers to achieve growth. Additionally, 66% of survey respondents already have two or three deals in the works.

Another report, this one from PricewaterhouseCoopers, points to the growth in M&A deals in China. The report said China had 115 outbound M&A deals in the first three months of 2016 worth $82.6 billion, about double the amount from the same period in 2015.

Companies are having to radically improve supply chain operations as e-commerce demands increase. A new report from Zebra Technologies Co., showed many companies are increasing the number of warehouses they have as well as expanding existing ones, taking more time to train new staff and ramping up logistics technology. For instance, 72% of logistics professionals expect to use voice-directed picking solutions by 2020, up from the 30% in 2015.


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