Mumbai: Activity in India’s dominant services sector expanded at its fastest pace in more than a decade, signaling a strong rebound as lockdowns ease and the pace of vaccinations improve in Asia’s third-largest economy, a survey showed Wednesday.
The IHS Markit India Services Purchasing Managers’ Index rose to 58.4 in October from 55.2 in September — the third straight month of expansion as the economy shrugs off pandemic disruptions. A reading above 50 signals growth while a print below that denotes contraction in activity. Service providers reported substantial upturn in business activity, with growth in new orders at its strongest since July 2011.
That strength in activity and demand happened despite an increase in input as well as output prices.
“A substantial rise in prices charged for the provision of services in India had no detrimental impact on demand,” said Pollyanna De Lima, economics associate director at IHS Markit. “That said, service providers were concerned that persistent inflationary pressures could deter growth in the coming year.”
A separate survey of factory managers earlier in the week showed India’s manufacturing activity had momentum, with the index rising to 55.9 in October from 53.7 in September. The surveys together helped the composite index rise to to 58.7 last month, from 55.3 in the previous month — the strongest monthly expansion since January 2012, IHS said.
“A sharp pickup in India’s composite purchasing managers’ index further above the 50 threshold underlines a faster pace of recovery,” said Abhishek Gupta, senior economist at Bloomberg Economics. “This poses an upside risk to our growth forecast.” –Bloomberg
Also read: Indian economy shows more signs of recovery as festive season kicks off
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