Bengaluru: India’s dominant service industry began 2020 in a buoyant mood as activity accelerated in January at the fastest pace in seven years on strong domestic demand, a private survey showed on Wednesday.
The results would likely bring some relief for markets and policymakers after only modest spending increases in a recent budget had disappointed investors looking for more robust stimulus to support a stuttering economy.
The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 55.5 in January from December’s 53.3. It was the highest reading since January 2013 and above the 50-mark separating growth from contraction for a third straight month.
“The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on to the momentum gained at the end of 2019,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.
“With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012.”
A sub-index tracking new business also climbed to its highest since January 2013, encouraging firms to maintain a strong hiring rate.