India Services PMI Expands For First Time In Eight Months
A gauge of India’s services sector moved back into the expansion zone for the first time in eight months as economic activity continues to pick up on easing lockdown curbs.
The India Services Business Activity Index, compiled by IHS Markit, stood at 54.1 in October compared with 49.8 in September, according to a media statement. A reading above 50 indicates an expansion in business activity. The latest reading pointed to a solid rate of growth in output that was stronger than its long-run average, the release said.
With manufacturing activity climbing to the highest in over a decade, the Composite PMI Output Index rose to 58 in October from 54.6 in September. That’s the strongest in close to nine years.
According to surveyed members, the upturn was supported by improved market conditions amid the loosening of Covid-19 restrictions. Surveyed companies reported an increase in new work, largely from domestic markets as new orders from abroad declined further. Though the deterioration in international demand was the slowest since March, it remained sharper than pre-Covid levels.
Services companies continued to report rising expenses, taking the current sequence of cost inflation to four months. The latest increase was solid and the strongest since February, the release said. Surveyed members mentioned higher fuel, maintenance and material prices. But only a few service providers lifted their fees, passing through the rising cost burdens to their clients, with the vast majority of firms leaving prices unchanged from September. As a result, the overall rate of charge inflation was marginal and the slowest in the current three-month period of increases.
Employment continued to decrease amid reports of workers on leave failing to return and difficulties in hiring staff. Payroll numbers contracted across the five monitored sub-sectors, the release said.
The 12-month outlook for business activity continued to remain positive, with hopes of a vaccine to be rolled out. It, however, remained subdued in the context of historical survey data.