Service sector activity growth hits 7-year high

TIL Desk/Business/New Delhi/ India’s services sector activity surged to a seven-year high in January driven by sharp increase in new business orders, leading to job creation and business optimism amid favourable market conditions, a monthly survey said on Wednesday.  The IHS Markit India Services Business Activity Index rose from 53.3 in December to 55.5 in January, signalling the strongest upturn in output in seven years.

“The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on to the momentum gained at the end of 2019,” said Pollyanna de Lima, Principal Economist at IHS Markit. New work intakes also expanded to the greatest extent in seven years. Fresh business orders were mainly generated domestically, as exports decreased at the start of the year.

A number of panellists mentioned weaker demand from China, Europe and the US.  “With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012,” Lima said. Meanwhile, the Composite PMI Output Index that maps both the manufacturing and services sector increased from 53.7 in December to a seven-year high of 56.3 in January.