Service Sector activity rebounds in July, quickest increase of output: PMI
New Delhi, Aug 5 (KNN) Driven by new business order, the country’s service sector activity in July returned to growth territory that rose at the fastest pace since October 2016, a monthly survey showed on Monday.
The IHS Market India Services Business Activity Index rose to 53.8 in July from 49.6 in June, pointed to the quickest increase of output in one year.
"PMI data indicated that the strongest upturn in new work for nearly three years led to a rebound in business activity," said Pollyanna de Lima, Principal Economist at IHS Market.
Moreover, in PMI parlance, a print above 50 means expansion while a score below that denotes contraction.
Survey respondents have linked the upturn in business activity to a promising government budget, strengthening the new demands.
New businesses have been secured from the public and private sectors, as well as domestic and international markets. “These favourable results from the service sector were accompanied by improved momentum among goods producers, which combined showed the sharpest rise in output for eight months," Lima said.
Moreover, job creation has picked up to be the strongest since early 2011 in response to strengthening demand conditions and upbeat predictions for the economic outlet.
Lima said that “India’s labour market continues to go from strength to strength with the pace of service sector’s job creation, the highest in over 8 years and also the ongoing expansions in the employment base should support household spending and consumer confidence in the near term”.
The survey further noted that the July data indicated an improvement in business optimism across the service economy
Experts believe that the Reserve Bank of India (RBI) will continue with its dovish stance in the policy review meet that kicked off on Monday to boost slowing economic growth.