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  Business   Service sector grows fastest in 19 months

Service sector grows fastest in 19 months

AGE CORRESPONDENT
Published : Feb 4, 2016, 3:36 am IST
Updated : Feb 4, 2016, 3:36 am IST

India’s service sector grew at its fastest pace in over 19 months in January amidst a strong pick up in demand, a business survey showed on Wednesday.

India’s service sector grew at its fastest pace in over 19 months in January amidst a strong pick up in demand, a business survey showed on Wednesday.

The Nikkei Services Pur-chasing Managers’ Index (PMI) climbed to 54.3 in January from 53.6 recorded in December, marking a seventh successive monthly expansion of new business inflows pointing to a accelerated expansion of activity across the sector.

A reading above 50 indicates an expansion in business activity while a reading below suggests contraction.

According to the survey, the growth was noted in four of the six monitored categories, the exceptions being hotels and restaurants and transport and storage. Amid forecasts of further improvements in demand and favourable government policies, service providers in India expect output to continue to increase over the course of the next year.

Additionally, the degree of optimism registered in January was the most pronounced in six months.

The survey noted that the higher workload encouraged service providers to hire additional staff in January, following stagnation in the prior month.

Nevertheless, the rate of job creation was only fraction as the vast majority of survey members reported unchanged workforce numbers.

“The Indian economy shifted into a higher gear in January, supported by a quick rebound in manufacturing production following last month’s floods in Chennai. Concurrently, the service sector gained traction and posted its strongest monthly gain in activity for over one-and-a-half years. A strong upturn in new business is an especially positive note from January’s survey, which underpins hopes for further growth of activity across the country’s private sector in the near-term,” said Pollyanna De Lima, an economist at Markit.