After contracting in the month of February, activity in India’s services industry bounced back to modest growth in March, with greater inflows of new work. Softening inflationary pressures along with fastest job creation at services firms, also drove overall business activity during the reported month. However, outstanding business increased at service providers, on account of greater volumes of new work and a lack of capacity.
According to the survey report, the seasonally adjusted Nikkei Services Business Activity Index rose back above the 50.0 no-change mark in March at 50.3 from 47.8 in February. The Nikkei India Composite PMI Output Index which measures both manufacturing and services too climbed to 50.8 in March from 49.7 in February, driven by growth in both the manufacturing and service sectors.
The report further stated that new business improved in the service sectors with enhanced marketing initiatives and, in some instances discounts provided by them. Besides, new business in the manufacturing sector also rose for the fifth consecutive month during March, but the rate of expansion moderated to the slowest rate in the current sequence, mirroring the weakest gain in new export orders since November.
On inflation front, input cost inflation in the both service and manufacturing sector softened from February’s three-month high, but was marked overall amid increasing prices of items like fuel, food items and gold. Besides, output charge inflation eased to the weakest in 2018 so far, though the both the sectors raised output prices to pass on their higher cost burdens to consumers.