PMI: Service activity improves in April, job creation at 7 year high

NEW DELHI: India’s service sector continued to improve at the start of 2018-19 with business activity rising at a faster pace, supported by new order growth, a private survey showed on Friday.

The Nikkei Services Purchasing Managers' Index, compiled by IHS Markit, rose to 51.4 last month from March's 50.3, above the 50-point mark that separates growth from contraction.

Moreover, reflecting improvements in demand conditions, job creation accelerated to the sharpest since March 2011.


“It was encouraging to see the Indian service economy report a positive start in the April quarter, with output growth gaining momentum as demand conditions improve,” said Aashna Dodhia, economist at IHS Markit and author of the report.

Consistent with the overall rise in business activity, the seasonally adjusted Nikkei India Composite PMI Output Index rose from 50.8 to a three-month high of 51.9 in April, driven by faster output growth in both the manufacturing and service sectors.

However, Dodhia said as the service economy contributes a greater proportion to real GDP, and continued to be outperformed by its manufacturing counterpart, overall private sector growth was only modest and below the historical trend.

Confidence upbeat
Firms operating in the service sector remained confident towards the 12-month outlook for output in April.

Expectations of further improvements in economic conditions was the key factor that supported confidence, with around 23% of the survey panel forecasting growth, according to the survey.