Business activity growth returns on back of surging new orders: PMI

Economy


NEW DELHI: Business activity in India’s service sector reached a 12-month high in July boosted by the fastest output growth in a year through stronger domestic and international demand and a pick up in hiring, a private survey showed on Monday.

The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 53.8 last month from 49.6 in June, rising above the 50-mark that separates contraction from growth.

As per the survey report, strengthening demand leading to new work from both the domestic and overseas boosted output. New exports orders rose for the fifth consecutive month in July, growing at the fastest pace since the survey began measuring export growth in September 2014. The real estate and business services sector was the only sector that did not witness output growth in July according to the report.

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“Encouragingly, service providers reported a widespread improvement in demand, from the public and private sectors as well as domestic and international markets. Growth of export orders hit a series peak,” said Pollyanna De Lima, principal economist at IHS Markit and author of the report.

A sister survey last week had shown manufacturing activity in India also strengthening in July due to a pickup in demand with the Nikkei India Manufacturing Purchasing Managers’ Index rising to 52.5 in July from 52.1 in June.

Put together, the Nikkei India Composite PMI Output Index rose to and eight month high of 53.9 from 50.8 in June.

Job creation across both the manufacturing and services sectors rose to five-month high in July according to the report

“PMI data indicated that the strongest upturn in new work for nearly three years led to a rebound in business activity,” De Lima said adding that greater employment in the manufacturing and service sectors should support household spending and consumer confidence in the short term.



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