05 Jul 2017 12:59 IST

Services PMI rises to eight-month high of 53.1 in June

A reading of over 50 indicates expansion

Led by a sharp upturn in new work, the Nikkei India Services PMI Business Activity Index rose to an eight-month high of 53.1 in June. It stood at 52.2 in May.

A reading of over 50 indicates expansion while a number below that denotes contraction in activities.

“Business conditions in India’s service sector continued to improve in June as a solid and accelerated upturn in new work resulted in a faster increase in activity,” Nikkei said in a release, adding that the headline measure averaged 51.8 for the first quarter of the 2017 financial year, which is the highest quarterly figure since the second quarter of 2016.

Job creation was also maintained at May’s 47-month record pace.

The best-performing sub-sector in June was financial intermediation, where growth rates surpassed those seen elsewhere. Activity and incoming new work rose in four out of the six broad categories covered by the survey, except for hotels and restaurants and renting and business activities.

The Nikkei India Composite PMI Output Index also rose to an eight-month high of 52.7 in June from 52.5 in May.

“Growth of service sector activity and inflows of new business picked up as better demand conditions and marketing efforts bore fruit… This suggests that GDP growth is likely to rebound from the sharp slowdown noted in the first three months of 2017,” said Pollyanna De Lima, economist at IHS Markit, and author of the report.

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