India's services industry returns to growth in November on strong demand: PMI

New Delhi: India’s dominant services sector bounced back to growth in November, expanding at its fastest pace in four months, driven by a strong pick-up in new business, a private sector survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 52.7 last month from 49.2 in October, above the 50-mark separating contraction from growth on a monthly basis.

“The main positive to be taken from November’s survey was a renewed increase in new work, which provided the platform for growth of services activity and employment whilst resulting in an improvement in business confidence,” said Pollyanna De Lima, principal economist at IHS Markit, in a press release.

A sub-index tracking demand jumped to 53.2 from October’s 50.1, encouraging firms to accelerate hiring at the fastest pace in three months.

Wednesday’s upbeat survey comes after official data showed India’s annual economic growth slowed to 4.5 per cent in the July-September quarter, its weakest pace since 2013.

The Reserve Bank of India has cut its key interest rate five times this year and was expected to lower borrowing costs by 25 basis points to 4.90 per cent on Thursday, according to a Reuters poll.

The sharp expansion in both services and manufacturing activity pushed a composite index to a four-month high of 52.7 in November, from 49.6 in the previous month.