The growth of India’s service sector slowed in the month of November, although it remained well above the 50-level that separates growth from contraction, with a further upturn in new work supporting business activity growth and the first rise in employment for nine months.
As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 53.7 in November from 54.1 in October. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - eased to 56.3 in November from 58.0 in October. The report further noted that new business inflows rose for the second straight month and solidly, despite growth easing from October.
The upturn in total new work was driven by the domestic market, with new export orders decreasing sharply again in November. Services firms hired additional workers in November, ending an eight-month sequence of job shedding. However, the rate of employment growth was marginal overall as some companies reported having sufficient staff to cope with current workloads.
On the price front, rates of inflation for input costs and output charges accelerated, both of which outpacing their respective long-run averages. Meanwhile, services firms were confident of a rise in business activity in the coming 12 months. The overall degree of optimism improved to a nine-month high. Positive sentiment was boosted by hopes that a vaccine for COVID-19 will be rolled out.