December 2017: Services PMI Rises to 50.9

India’s services sector bounced back into the growth zone in December after a contraction in November.

The Nikkei India Services Purchasing Managers’ Index Business Activity Index rose to 50.9 in December from 48.5 in November. A reading above 50 on the survey-based index indicates economic expansion, while a reading below 50 points toward contraction.

The Nikkei India Composite PMI Output Index, which includes both services and manufacturing, rose to 53 from 50.3 in November, the highest since October 2016.

Data released earlier in the week showed core sector growth at a 13-month high of 6.8% in November, manufacturing PMI at a five-year high in December as well as robust double-digit growth by the auto sector in that month.

Stable new orders and improved output helped services bounce back in December, but the GST hindered many firms from securing new business.

A similar survey on Tuesday by the same organisation showed manufacturing activity expanding at the fastest pace in five years in December.

Hiring in services firms rose at the fastest pace since September and remained above average, underpinned by an overall improvement in the outlook of future business conditions.

Business sentiment was broadly similar to November’s four-month high and an expected improvement in demand conditions was cited as the key factor behind business confidence, the survey showed.

Cost inflationary pressures also eased from November, translating into service providers raising output prices at the slowest pace since mid-2017 in December.

No comments: