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Services sector output rises in July: PMI

About 51.7 points rise in new business helps services rebound after 7-month low output

Policy Pulse
Publish Date: Aug 3 2016 3:59PM | Updated Date: Aug 3 2016 3:59PM

Services sector output rises in July: PMI

India's services sector output recovered to a three-month high of 51.9 in July as compared to June. New business grew at a faster pace, shows a business survey.

The widely tracked Nikkei/Markit Services Purchasing Managers' Index (PMI) was remains stagnant till June, when the output declined to 50.3 points in June. It was the weakest since November 2015.
The seasonally adjusted index is a composite single figure which is the indicator of service sector performance. A reading above 50 represents expansion, while one below this level means contraction.
Growth of new business, which was at its most pronounced since April boosted output growth, noted the survey. July data highlighted a second consecutive monthly increase of outstanding business at service providers.
Likewise, manufacturing order books increased at the quickest pace since March, outweighing the recent slowdown in services and therefore contributing to a quicker expansion in private sector new business. 
Amid reports of lower prices paid for fuel and some commodities, average input costs facing service providers fell in July. The decrease was the first since September 2015 and the rate of reduction was slight overall. 
Data was released earlier this month showed that the manufacturing output has recovered to some extent, rising to 51.8 in July from 51.7 in June, mainly on the back of rising new business.