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India’s service sector growth wanes to 52.2 in January

05 Feb 2019 Evaluate

India’s services sector activity cooled for the second straight month in January amid the weakest upturn in new work since last September. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index slipped to 52.2 in January from 53.2 in December. However, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – remained unchanged at 53.6 in January.

The report found that the slowdown was centred on the domestic market as new orders from abroad grew to the greatest extent since last September, following back-to-back declines at the end of 2018. The sales increased moderately and stood the weakest in four months. Further, the rise in backlogs quickened from December but it was modest. Likewise, unfinished work increased in the goods-producing economy. As per report, employment at services continued to expand, with job creation at a three-month high. The growth in job creation was underpinned by ongoing increases in new business and favourable market conditions.

On the price front, a softer increase in prices charged for the provision of services was evident in January, with 97% of firms leaving their fees unchanged during the reported month. There was a renewed upturn in factory gate charges at the start of the year, but the rise was negligible in the context of historical data.

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