Services rebound after four months, PMI rises to 50.3 in February
NEW DELHI: Slow recovery in demand helped India's services industry rebound in February for the first time in four months, a private business survey showed on Friday.
The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction.
The index had declined to a near-three year low in November after the demonetisation drive which washed away 86% of cash out of circulation.
A sister survey on Wednesday showed expansion in manufacturing activity.
With manufacturing production rising again in February, the seasonally adjusted Nikkei India Composite PMI Output Index rose from 49.4 in January to 50.7, pointing to the first increase in private sector activity across India since last October.
However, Pollyanna De Lima, economist at IHS Markit and author of the report said it is still too early to state that expansion rates will climb to their trend levels in the near term. "Companies remain reluctant to take on additional staff and confidence towards the 12-month outlook for output dipped to its second-lowest mark in over one year. These factors indicate that, so far, firms are doubtful about the sustainability of the economic recovery," De Lima guided.
The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction.
The index had declined to a near-three year low in November after the demonetisation drive which washed away 86% of cash out of circulation.
A sister survey on Wednesday showed expansion in manufacturing activity.
With manufacturing production rising again in February, the seasonally adjusted Nikkei India Composite PMI Output Index rose from 49.4 in January to 50.7, pointing to the first increase in private sector activity across India since last October.
However, Pollyanna De Lima, economist at IHS Markit and author of the report said it is still too early to state that expansion rates will climb to their trend levels in the near term. "Companies remain reluctant to take on additional staff and confidence towards the 12-month outlook for output dipped to its second-lowest mark in over one year. These factors indicate that, so far, firms are doubtful about the sustainability of the economic recovery," De Lima guided.
