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India’s services sector expanded at its fastest pace in eight months in October, largely aided by a surge in new business, which hit its highest since February, a private survey showed.
The Nikkei Services Purchasing Managers Index (PMI) rose to 53.2 in October from 51.3 per cent in September, the Survey conducted by Markit showed. This is the fourth month above the 50-level, which separates growth from contraction.
In contrast, the Caixin General Services PMI — which covers China’s services sector — saw a modest rate of growth to 52 in October, up from September’s 14-month low of 50.5. This latest reading was slower than the historical average.
Unlike the situation in India, services confidence dropped to a record low in China. Business sentiment at services companies in China eased to the lowest in ten years of data collection, a Markit Survey showed.
Lower selling price Services companies in India lowered their selling prices for the second successive month in October. That said the pace of reduction was only marginal.
Commenting on the Indian Services PMI survey data, Pollyanna De Lima, an economist at Markit, said that India’s economic growth has shifted into a higher gear in October, driven by the services sector. “The upwards trend in private sector output reflected stronger inflows of incoming new work, one that was most marked since March. Services companies saw a faster rise in new business than their manufacturing counterparts, with data implying that price discounts supported growth of new projects,” Pollyanna said.
The latest Services PMI reading should provide some comfort to policymakers after another Markit Survey on manufacturing PMI came in at 22-month low in October.
October data indicated that services sector employment was unchanged. About 98 per cent of survey members reported no change in payroll members since the preceding month.
Higher staffing Goods producers signalled higher staffing numbers, but the rate of job creation was only marginal. Amid reports of higher prices paid for petrol and food, input costs faced by service providers rose in October.
Nonetheless, the rate of increase was relatively muted in the context of historical data.
In October, purchase prices at manufacturers rose for the first time in three months and at a rate that, although modest, was the quickest since May.
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