Registering significant uptrend, India’s Services sector output growth improved in March, driven by a marked increase in new business orders. The seasonally adjusted Nikkei India Services Business Activity Index climbed to 54.3 in March from 51.4 in February. A reading above 50 indicates expansion while one below this level means contraction.
As per survey the seasonally adjusted Nikkei India Composite PMI Output index, which maps both manufacturing and services sectors, climbed to a 37-month high of 54.3 in March from 51.2 in February. New business expanded for the ninth consecutive month and the sub-index, an indicator of domestic and foreign demand, reached its highest level since June 2014.
The survey however noted that despite the improvement in new orders, firms have barely added any jobs in the last two years, with March once again seeing only a fractional improvement. With the sole exception of the mild increase in hiring seen among service providers last July, the two surveys collectively have signalled a broadly stagnant labour market for the past two years.
On price front, the survey highlighted that the input costs across the private sector rose at the quickest rate in three months and charge inflation likewise accelerated, suggesting headline inflation may pick up in the coming months. The survey further signaled a reassuringly robust end to the financial year for the Indian economy, with sharper increases in new business spurring activity growth in both the manufacturing and service sectors.