New Delhi: The Indian service sector remained in expansion mode in January, registering the fastest rise in activity in three months driven by a renewed increase in new business orders, says a monthly survey.
Even though growth rates for activity and employment accelerated since December, it remained weaker than their respective long-run survey averages.
The seasonally adjusted Nikkei Services Business Activity Index improved to 51.7 in January, up from 50.9 in December, signalling a faster expansion. The index remained above the neutral mark of 50 in January, that separates growth from contraction for the second consecutive month.
In November, the index stood at 48.5. “The recovery across India’s service sector continued during January, with growth in output picking up strongest since June 2017 as underlying dem-and conditions impro-ved,” said Aashna Dodhia, Economist at IHS Markit and author of the report.
Indian service providers addressed new business inflows and rising backlogs by expanding workforces for the fifth consecutive month in January. Moreover, the rate of job-creation was the fastest since last September.
In terms of prices, Mr Dodhia said input cost inflation across the service sector remained weak by historical standards, although service providers were able to pass on a greater proportion of cost burdens to customers.
