Indicating a marginal uptick in services sector activities in December, the Nikkei Services Business Activity Index rose to 50.9 in the month from 48.5 in November. Similarly, the Nikkei India Composite PMI Output Index rose to 53 in December from 50.3 in November.

A reading above 50 on the monthly index indicates expansion in production while one less than 50 denotes contraction. According to the survey, new orders stabilised in December while job creation was the fastest since September.

PTI reports

Even as there was a turnaround, business activity growth in December was slight and remained well below the average recorded for the survey history as a whole. "India’s service economy showed signs of recovery as it returned to marginal expansion in December. That said, it remained on a weak growth trajectory amid reports that the Goods and Services Tax (GST) was still hindering efforts to secure new clients," said Aashna Dodhia, Economist at IHS Markit, and the author of the report.

"Still, the best overall performance of the economy was recorded since October 2016, endorsing the standpoint that the economy is recovering from the implementation of the twin shocks of demonetisation and GST," Dodhia said.

In terms of job creation both sectors -- manufacturing and services -- outstripped historical averages signalling a continued revival of the labour market. On the prices front, GST continued to exert upward pressure on manufacturers’ cost burdens in December.

Overall, input cost inflation quickened to the sharpest since April and subsequently, firms raised their average selling prices at the fastest pace in 10 months, the report said.

 04 Jan 2018, 11:34 AM