Service sector growth touches 3-month high in July: PMI

NEW DELHI: The pace of activity in India's service sector picked up pace in July after slowing in June, a private survey showed on Wednesday .

The Nikkei India Services Business Activity Index was at its three month high of 51.9 in July compared with 50.3 in June.

A reading above 50 on the index indicates economic expansion while a figure below that indicates contraction.

The growth is attributed to faster increase in new business underpinning stronger growth of output and boosting confidence. Part of the upswing in incoming new work was supported by price discounts. Output charges were lowered for the first time in nine months, while input costs also decreased.

"The Indian service economy started the second semester on a solid footing, posting its strongest performance since April and thereby indicating that underlying demand conditions remained reasonably firm", said Pollyanna De Lima, economist at Markit, the agency which compiles the index.

Data released by the same agency on Monday showed that India's manufacturing activity was at a four month high with manufacturing PMI edging up to 51.8 in July from 51.7 in June.

With growth of manufacturing production also quickening, the seasonally adjusted Nikkei India Composite PMI Output Index climbed to a three- month high of 52.4 in July (June: 51.1). This reading was consistent with a moderate increase in private sector activity overall.