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India services activity rises to 10-month high in December

By Ishaan Gera

  • 06 Jan 2016
India services activity rises to 10-month high in December
Other | Credit: Reuters

India's services output grew to a 10-month high in December thanks to stronger growth in new business, a survey showed on Wednesday.

The Nikkei Services Business Activity Index, which measures services output, for India rose to 53.6 in December from a five-month low of 50.1 in November, according to data released by financial information services firm Markit.

Output rose in four of the six broad areas of the service economy, the exceptions being hotels and restaurants and transport and storage. “The best-performing categories in December were ‘other services’ and financial intermediation,” the report said.

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The momentum in services output comes as a relief for the Indian economy after data showed manufacturing activity contracted in December. Higher services output helped accelerate India’s overall private sector activity in December to 51.6, Markit said.

The Nikkei Purchasing Managers' Index measures the health of a sector based on surveys of private-sector companies. A reading above 50 denotes expansion.

While the report shows some recovery in the private sector, Pollyanna De Lima, economist at Markit, highlighted that the economy was still far from recovery and that conditions will remain challenging in coming months.

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“Overall, the PMI data continue to portray a struggling economy, weighed down by weak underlying demand,” she said.

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