The seasonally adjusted Nikkei India Services Business Activity Index rose in November 53.7 vs. 52.2 in October, signalling a solid upturn in output that was the strongest since July.
The firm highlighted greater client numbers, favourable market conditions and sales growth as factors boosting activity. Information & Communication led the increases in both business activity and new work, while Real Estate & Business Services was the only category to not see expansion, a monthly survey said.
November saw India’s economy spring back to life, as manufacturers and service providers registered stronger increases in business activity amid an upsurge in demand.
Inflows of new work expanded at a pace not seen for over two years, supporting further job creation and an uptick in confidence. The picture for prices was mixed as input cost inflation moderated to a seven-month low, but firmer demand enabled firms to hike their charges to a greater extent.
Meanwhile, the Nikkei India Composite PMI Output Index improved from 53 in October to 54.5 in November; and highlighted to the fastest expansion in private sector activity since October 2016. Growth was stronger in manufacturing than in services, though quicker increases were noted across both sectors.
Not only did services new business increase for the ninth month in a row, but also to the joint-strongest extent in over two years. Underlying data indicated that the upturn reflected robust demand in the domestic market, as newly-launched export business data showed a renewed decline in new work from abroad. By comparison, goods producers noted the fastest rise in order books in the year-to date.
Moreover, exports grew at the quickest pace in close to four years. Services jobs rose in November, stretching the current sequence of expansion to 15 months.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, Principal Economist at IHS Markit, and author of the report said, “Growth in India’s dominant service sector leapt to a four-month high in November, thanks to solid increases in new work at home, which in turn led to a continued rise in job numbers. The welcoming news complement similar upbeat results in the manufacturing industry, released earlier in the week, and so far suggest that the private sector economy will provide impetus to Q3FY18 GDP results.”
“Keeping up with levels of new work and increased activity, additions to the workforce were maintained for the sixteenth month running. So far, 2018 proved to be the strongest year for employment growth for a decade.”
“Of respite to firms, there was a cooling of cost inflationary pressures midway through the third quarter. This, coupled with firmer demand, enabled manufacturing and services companies to seek to improve their margins by hiking charges at quicker rates,” Pollyanna De Lima added.