India's Service Sector remains positive, PMI at 52.5 in Feb
New Delhi, Mar 5 (KNN) Economic conditions in India’s dominant service sector remained positive in February, with a quicker expansion in new work supporting a faster increase in output and solid job creation, said a survey.
The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 52.5 in February from January's 52.2, staying above the 50-mark that separates growth from contraction for a ninth straight month.
Business sentiment among service providers strengthened in February on the back of expectations of further improvements in domestic demand, advertising efforts and the offering of new services.
Commenting on the Indian Services PMI survey data, Principal Economist at IHS Markit, and author of the report, Pollyanna De Lima said, “Indian economic growth strengthened halfway through the final quarter of FY18 to the second fastest since last July. The acceleration was driven by a thriving manufacturing sector, where production growth hit a 14-month high.”
He added, “Notably, manufacturing new export orders rose solidly and at a quicker rate against a backdrop of weakening global demand and trade frictions. When looking at other emerging markets, PMI data showed that the Indian goods producing industry outperformed those in Brazil, Russia and China by a considerable margin.
“Looking at the service sector in isolation, the PMI survey showed faster increases in new work and business activity supporting one of the best upturns in jobs for eight years,” he said.
Lima concluded by saying, “Still, these results confirmed a growing performance mismatch between manufacturing and services. Goods-producing companies outperformed their services counterparts for the seventh straight month, with the gap in output performance the widest for a year.”
Upbeat demand conditions fed through to the labour market, with service sector jobs expanding at the same solid rate that was registered at the start of 2019.
Outstanding business continued to increase in February. Services companies indicated that higher workloads reflected delayed client payments.
The rise in backlogs was the quickest in 16 months and outpaced that seen in the manufacturing economy.
Input prices ticked higher during February, with a number of service providers indicating greater fuel costs. That said, the rate of inflation softened slightly from January and was below the average for the near thirteen-and-a-half-year survey history.
Nevertheless, for the second month in a row, services firms noted a quicker rise in cost burdens than their manufacturing counterparts. (KNN/JM)