India Services PMI up for 2nd straight month in April

New Delhi, May 4 (KNN) India’s service sector showed improvement for the second straight month in April signalling a faster expansion in output at Indian service firms than in the prior month, according to a survey.

The seasonally adjusted Nikkei India Services Business Activity Index rose from 50.3 to 51.4 in April.

This signalled a faster expansion in output at Indian service firms than in the prior month. According to anecdotal evidence, greater inflows of new work helped to bolster activity.

However, the latest upturn was modest and remained weaker than the series trend. The seasonally adjusted Nikkei India Composite PMI Output Index rose from 50.8 to a three-month high of 51.9 in April, driven by faster output growth in both the manufacturing and service sectors, said the survey.

Favourable demand conditions were behind the latest rise, according to anecdotal evidence. New orders placed at Indian manufacturers rose for the sixth successive month during April. Despite being modest, the rate of growth quickened.

There were reports of stronger market demand supporting new client wins. Outstanding business at service companies continued to increase during April. Despite softening from the prior month, the pace of accumulation was solid.

Commenting on the Indian Services PMI survey data, Aashna Dodhia, Economist at IHS Markit, and author of the report, said, “It was encouraging to see the Indian service economy report a positive start in the April quarter, with output growth gaining momentum as demand conditions improve. Subsequently, the best round of job creation since March 2011 was registered within the sector.

“India’s overall economy also saw price pressures moderating further, with input and output charge inflation registering at the slowest since September 2017 and June 2017 respectively,” she said.

The economist added that “The service economy continued to recover further from February’s temporary decline. However, as the service economy contributes a greater proportion to real GDP, and continued to be outperformed by its manufacturing counterpart, overall private sector growth was only modest and below the historical trend.”