Services PMI Eases In November While Remaining In Expansion Zone
A gauge of India’s services sector remained in expansion zone for the second straight month despite growth easing in October.
The India Services Business Activity Index, compiled by IHS Markit, stood at 53.7 in November compared with 54.1 in October, according to a media statement. A reading above 50 indicates expansion in business activity. Manufacturing activity eased to a three-month-low after climbing to the highest in over a decade in October. As such, the Composite PMI Output Index was at 56.3 in November from 58 in October.
Companies that signalled output growth commented on better demand conditions and a relaxation of Covid-19 restrictions, according to the statement. New business inflows rose for the second straight month despite growth easing since October. The increase in sales stemmed from a pick-up in demand, marketing efforts and the loosening of Covid-19 controls, the statement said.
The upturn in total new work was driven by the domestic market, with new export orders decreasing sharply again in November. The latest fall in international sales, which is for the ninth consecutive month, was attributed to subdued global demand and travel restrictions, according to the statement.
Services firms hired additional workers in November, ending an eight-month sequence of job shedding. To be sure, the rate of employment growth was marginal overall as some companies reported having sufficient staff to cope with current workloads.
Input prices continued to increase in November, with the rate of inflation accelerating to a nine-month high and outpacing its long-run average. Consequently, the increase in selling prices was the highest since July 2017.
Looking ahead, 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.