Service sector activity hits seven-year high in January; here is what it means

India’s services sector activity picked up last month to a seven-year high which was driven by a rise in new business orders, leading to job creation and business optimism amid favorable market conditions, a monthly survey said.

The IHS Markit India Services Business Activity Index rose from 53.3 in December to 55.5 in January which showed the strongest surge in output in seven years.

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“New work intakes also expanded to the greatest extent in seven years”, said Pollyanna de Lima, Principal Economist at IHS Markit.

However, many panelists mentioned slower demand from China, Europe and the US amid global trade slowdown.

While the Composite PMI Output Index that maps both the manufacturing and services sector increased from 53.7 in December to a seven-year high of 56.3 in January.

Earlier this week, another survey said the country’s manufacturing sector activity reached to a near eight-year high in January.

Purchasing Managers’ Indexes (PMI) are economic indicators which are derived from monthly surveys of private sector companies.

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