After showing slowdown in activity during the previous month, India’s services sector gathered momentum in the month of February, with a quicker expansion in new work supporting a faster increase in output and solid job creation. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index rose to 52.5 in February from 52.2 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – also surged to 53.8 in February as against 53.6 in January.
The survey report found that new business received by services companies grew to a greater extent in February, on the back of strengthening underlying demand along with marketing efforts. Besides, the upturn in services new work was domestically driven, as highlighted by a renewed contraction in external sales. The report also noted that service sector jobs expanded at the same solid rate that was registered at the start of 2019. However, services firms 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.
On the price front, input prices ticked higher during February, with a number of service providers indicating greater fuel costs. Moreover, the pass-through of additional cost burdens to clients resulted in a further increase in services fees, the twenty-fifth in as many months. However, the rate of charge inflation moderated to the joint-weakest over this period.
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