Services sector activity rose to its highest in four months in May, driven by an upturn in incoming new business. The Nikkei India Services Business Activity Index climbed to 52.2 in the past month from 50.2 in April, marking a strong rebound in a sector that makes up nearly 60% of the economy.
India's economy grew 6.1% in the January-March quarter, its lowest in more than two years.The new survey suggests a rebound in the first quarter of the current fiscal year.
A reading above 50 on this survey-based index indicates expansion, while a figure below that suggests contraction in activity.
Data released by the same firm last week had showed May manufacturing activity growing at its slowest in three months. But the strong upturn in new services work made up for the slowdown in manufacturing orders, helping new work across the private sector economy to expand at a faster pace in May than the previous month.
Overall, the seasonally adjusted Nikkei India Composite PMI Output Index rose to a seven month high of 52.5 in May from 51.3 in April.
The higher activity -though it is still below par for India -helped create employment.