MUMBAI: Shrugging off the impact of the recent demonetisation measure, India’s services sector rebounded in February following continuous decline since the November demonetisation measure, revealed key macro-economic data on Friday.
The Nikkei India Services Purchasing Managers’ Index (PMI) stood at 50.3 in February, up from 48.7 registered in January, and as compared to 46.8 in December 2016.
An index reading of above 50 indicates an overall increase, while below 50 an overall decrease.
The PMI series of data are published by the leading global diversified provider of financial information services “IHS Markit”.
“The upturn in services activity follows news from the sister PMI survey showing factory production growing for the second straight month in February,” said Pollyanna De Lima, economist at IHS Markit and author of the report.
“It is still too early to state that expansion rates will climb to their trend levels in the near term. Companies remain reluctant to take on additional staff and confidence towards the 12-month outlook for output dipped to its second-lowest mark in over one year,” De Lima said, and added that firms continue to be doubtful about the sustainability of the economic recovery.
Besides, the seasonally adjusted Nikkei India Composite PMI Output Index also rose during the month in consideration to 50.7, from 49.4 in January signalling the first increase in private sector output since last October.
“With demand conditions strengthening in India, new business inflows rose in both sectors, leading to the first increases in private sector new work orders and output since October 2016. Nevertheless, growth rates were mild at best and far from their historical averages,” De Lima said.
Input cost inflation accelerated and service providers also raised their charges so that “the increase in output charges was the first in five months and the most pronounced since mid-2016”, the report said.