India's services sector activity rose to its highest level in over one-and-a-half years in January owing to strengthening demand and improved weather conditions, which led to a flurry of new orders. The seasonally adjusted Nikkei Services Business Activity Index climbed to 54.3, a 19-month high, as against 53.6 in December.
This is the second set of upbeat data for the economy at the start o the new calendar. Earlier, manufacturing PMI had bounced to a four-month high of 51.1 in January as showed by the Nikkei India Manufacturing Purchasing Managers' Index.
Not only did four of the six monitored categories, except hotels & restaurants and transport & storage, register growth, but more importantly, new business in flows expanded for the seventh successive month. The overal composite PMI, which captures both manufacturing and services sector, jumped to an 11-month high of 53.3 compared with 51.6 in December. Lifting the index were a rebound in manufacturing production as well as stronger growth of services output.
Services input costs increased further in January, marking a four-month sequence of inflation. Purchase costs faced by manufacturers increased for the fourth consecutive month, but at a moderate and slower rate.
Amid forecasts of further improvements in demand and favourable government policies, service providers in India expect out put to continue to increase over the course of the next year.
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