The growth of India’s service sector extended into the new year, with growth of new work and business activity quickening since December. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 52.8 in January from 52.3 in December. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also jumped to 55.8 in January from 54.9 in December.
The report said that new business rose in January, marking a four-month period of expansion. The pace of growth was moderate, but accelerated from December. Further, marketing efforts, the reopening of some establishments and strengthening demand all supported the increase in sales. However, employment declined further, while exports contracted sharply.
On the price front, there was a slower rise in input costs and prices charged for the provision of services decreased again. Looking ahead, service providers were confident of a rise in output in the coming 12 months. Positive sentiment was supported by beliefs that the roll-out of COVID-19 vaccines would underpin demand growth and improvements in the wider economy. The overall degree of optimism was at an 11-month high.