Buoyed by new business orders, India’s services sector activity expanded at the quickest pace in three months in October.
The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 52.2 in October from 50.9 in September, driving the rate of job creation to the second-strongest in over seven and-a-half years, surpassed only in April this year A print above 50 means expansion, while a score below that denotes contraction. October marked fifth successive month of expansion.
The PMI services activity index is based on a survey of purchasing executives of more than 400 service providers divided into five categories: consumer services, transport & storage, information & communication, financial & insurance and real estate & business services.
Growth in business activity was recorded in three of the five monitored categories and led by information & communication. Declines were evident at finance & insurance and real estate & business services companies.
A sister survey last week showed strengthening manufacturing activity in October, improving the Composite PMI Output Index from 51.6 in September to 53 in October.
Improved order flows supported the pick-up in output amid favourable market conditions, greater client bases and fruitful advertising.
On the job front, Indian service providers continued to add to their payrolls and the sector witnessed the secondstrongest increase in employment since March 2011.
Anecdotal evidence indicated that hiring was boosted by greater levels of new business and improved demand conditions. Employment increased in all sub-sectors bar finance & insurance where a slight reduction was seen. The upturn was led by information & communication.
On the prices front, cost-inflationary pressures eased, resulting in a softer increase in selling prices.