Other Photo Credit: Reuters

India services output rises for 16th month in October

By PTI
03 November, 2016

Services sector activity in the country gathered pace in October, driven by sharper increase in new business orders amid strong demand and improved market conditions, says a survey.

The Nikkei India Services Purchasing Managers’ Index (PMI), which tracks services sector companies on a monthly basis, stood at 54.5 in October as against 52.0 in September.

The Services PMI recorded above the no-change mark of 50.0 for the 16th straight month, highlighting sustained growth in the sector. A reading above 50 means the sector is expanding while below that points to contraction.

“The service sector joined its manufacturing counterpart in offering a more upbeat level of performance this month, providing reassurance in the sustainability of the upturn of India s economy,” Pollyanna De Lima, economist at IHS Markit, and author of the report, said.

According to Lima, new business order flow was the main driver of output growth with survey respondents highlighting strong demand and improved market conditions.

Notwithstanding the uptrend in services sector activity, employment levels were unchanged during October. However, things are likely to change for the better in the coming months.

“One underlying concern is the sustained stagnant trend in workforces with both manufacturers and service providers showing some reluctance to hire. Hopefully, the added pressure on capacity shown in the PMI surveys will translate into job creation as we move towards the end of 2016,” Lima said.

On the prices front, the survey noted that input costs of providers rose but at a softer rate, and in turn selling prices remained broadly unchanged.

Meanwhile, manufacturing production also increased at a quicker rate. Subsequently, the seasonally adjusted Nikkei India Composite PMI Output Index rose to 55.4 in October from 52.4 in September, pointing to a marked pace of expansion in private sector activity that was the quickest in nearly four years, the survey said.

“Nonetheless, a healthy level of overall positive sentiment regarding future business opportunities was seen and with competitive pressures offering just a minor bump in the road of confidence, the services economy looks set to maintain its strong performance in the near term,” Lima said.

Like this report? Sign up for our daily newsletter to get our top reports.


Leave Your Comment
India February services growth eases to three-month low

India February services growth eases to three-month low

PTI 1 year ago
India’s economic growth slowed in February and the services sector activity fell to a 3-month low amid subdued growth in new orders, a monthly survey...
Manufacturing activity in India picks up in March on back of new orders: HSBC survey

Manufacturing activity in India picks up in March on back of new orders: HSBC survey

Ishaan Gera 2 years ago
Indian factory output rose for the 17th consecutive month on the back of a rise in new orders in the economy. Purchasing Managers Index (PMI)...
India's services sector growth dips to a six-month low in May

India’s services sector growth dips to a six-month low in May

TEAM VCC 1 year ago
India’s services sector growth fell to a six month low in May as new business inflows slowed, a private survey showed on Friday. The Nikkei...
No Comments

India services output rises for 16th month in October

Powered by WordPress.com VIP