Services PMI rises to 50.7 in September

NEW DELHI: Services sector activity in India expanded for the first time in three months in September, providing another set of data that showed the economy was recovering from the disruptions due to the goods and services tax ( GST).

The Nikkei India Services PMI rose to 50.7 in September from 47.5 in August following a surge in new business orders, triggering fastest rate of jobs creation in the services sector since mid-2011. A reading in excess of 50 shows expansion on this survey-based index.

“The Indian private sector regained some lost ground since the implementation of July's GST as service providers followed the manufacturing industry back to growth," said Aashna Dodhia, economist at IHS Markit and author of the report.

The PMI for manufacturing released on Tuesday showed an expansion for the second month running. Nikkei India Composite PMI Output Index, a combined reading of manufacturing and services sectors, rose to 51.1 in September, from 49 in August.

The core sector growth also rose to a fivemonth high of 4.9% in August, while commercial vehicle and car sales rose at a fast clip in September, pointing to a gradual recovery in the economy after GST-led disruption.

“The labour market was strengthened over the month as pace of job creation quickened to the fastest since mid-2011, led by transport and storage and consumer services sub-sectors,” Dodhia said.