Activity in India’s services sector expanded in November showing demand in this sector continues to be robust.
The Nikkei Markit Services Purchasing Managers’ Index (PMI) rose to 53.7 in November from 52.2 in October. This is for the sixth consecutive month that the index is above 50 mark which separates growth from contraction.
A buoyed government reacted immediately saying it was the fastest growth in composite PMI output index since Oct 2016.
“Fastest expansion in services PMI in past two years. Rising to 54.5. PMI notes quickest pace of growth in exports in Nov in last four years. Overall strong increase in business activity and demand. Should augur well for Q3 GDP growth,” says Economic Affairs Secretary Subhash Garg.
Principal economist at IHS Markit Pollyanna De Lima said, “the welcome news complements similar upbeat results in the manufacturing industry, issued earlier in the week, and suggest the private sector economy will provide impetus” to India’s Q3 fiscal year 2018 GDP results”.
On Tuesday, the Nikkei Manufacturing PMI in November had touched an 11-month high on the back of new order flows to companies and strong demand conditions.
The latest index is a shot in the arm for Prime Minister Narendra Modi-led government which only last week witnessed Indian economy growing to a three-quarter low in July-September period.