Showing recovery, the Purchasing Managers' Index (PMI) for services expanded to 52.7 in November as against 49.2 in October. This is first expansion after three months.
PMI is calculated on the basis of responses from purchasing managers in 400 companies. It is prepared by IHS Markit. Index below 50 shows contraction while above that means expansion.
According to a report prepared by IHS Markit, Indian service providers signalled a moderate rebound in business activity during November, with the return to output growth accompanied by a renewed rise in new business intakes, faster job creation and strengthening business confidence.
Meanwhile, pressures on operating margins intensified, with cost burdens increasing at a more marked pace than average selling prices. The upturn was associated with a pick-up in demand, improved technology and rising client numbers.
However, the headline figure remained below its long-run average of 54.2. The modest expansion of services activity was achieved by growth in three of the five categories monitored by the PMI survey, namely Consumer Services, Information & Communication and Real Estate & Business Services. Activity fell at Transport & Storage and Finance & Insurance firms.
Overall volumes of incoming new work increased to the greatest extent in four months, following a stabilisation in October. Companies that reported higher sales generally cited better demand conditions.
November data signalled a ninth successive rise in new business from international markets, with the pace of expansion accelerating slightly from October.