India’s services sector gained traction in January and posted its strongest monthly gain in over one-and-a-half years, a private survey showed on Wednesday.
Posting a 19-month high of 54.3 in January (as against 53.6 in December), the seasonally adjusted Nikkei Services Activity Index pointed to a marked expansion in activity across the sector. Growth was noted in four of the six monitored categories, the exceptions being ‘Hotels and Restaurants’ and ‘Transport and Storage’.
The overall rise in output was driven by a seventh successive monthly expansion of new business inflows.
Adjusted for seasonal factors, the Nikkei India Composite PMI Output Index, which maps both manufacturing and services, climbed to an 11-month high of 53.3 in January from 51.6 in December.
The data comes days ahead of the official third-quarter GDP estimates and advance estimates for 2015-16 by the Central Statistics Office on February 8.
The degree of optimism among service providers in January was also the most pronounced in six months. “Amid forecasts of further improvements in demand and favourable government policies, service providers in India expect output to continue to increase over the course of the next year,” said the release.
However, input costs rose further in January, marking a four-month sequence of inflation, albeit at a modest pace.
Commenting on the data, Pollyanna De Lima, economist at Markit, which compiles the survey, said: “A strong upturn in new business is a positive note from January’s survey, which underpins hopes for further growth in the near term.”