Mumbai: Growth in India’s services sector accelerated to a 21-month high in March as new businesses boosted output growth, a survey showed on Wednesday. The seasonally adjusted Nikkei/Markit Services Purchasing Managers’ Index (PMI) jumped to 54.3 in March after witnessing a sudden contraction in February. A reading above 50 indicates expansion in services activity while a reading below 50 signals contraction. This is the ninth consecutive month of expansion in services.
The survey noted that the incoming new work in the Indian private sector economy rose for the ninth month running and at the fastest pace in over three years. Stronger increases were noted in both the manufacturing and service sectors, which companies associated with an improved demand environment.
Despite the solid upturns in new business and output, the trend in employment remained subdued. Job creation across the private sector as whole was seen for the sixth straight month, but the rate of growth remained fractional overall.
“March PMI surveys signalled a reassuringly robust end to the financial year for the Indian economy, with sharper increases in new business spurring activity growth in both the manufacturing and service sectors. One disappointment, however, is the trend in employment, which showed little change through much of 2015-16. With the sole exception of the mild increase in hiring seen among service providers during last July, the two surveys collectively have signaled a broadly stagnant labour market for the past two years,” said Pollyanna De Lima, economist at Markit, which compiled the survey.
