Markit’s India Services PMI rises in March, points to strong growth in output

In March, India’s service sector’s conditions rebounded as new business recorded a marked and accelerated increase, stimulating output growth, according to Markit. However, the recent data shows that businesses in India are functioning below capacity as backlogs dropped for the second consecutive month and at the most rapid rate in seven years, noted Markit.

Markit’s Nikkei India Services Business Activity Index rose to 54.3 in March from February’s 51.4. This indicates a strong growth in output. According to sub-sector data, out of six monitored categories, activity expanded in five categories. Manufacturing production also registered strong growth, contributing to a noticeable growth in private sector output. In March, Markit’s Nikkei India Composite PMI Output Index rose to a 37-month high of 54.3 from 51.2 in February.

Incoming new work in the country’s private sector economy grew for the ninth consecutive month and at the most rapid pace in more than three years. Manufacturing and services sectors both recorded strong growth. Firms in India associated this with a rebound in demand environment.

Meanwhile, the trend in employment continues to be weak in spite of the strong upturns in output and new business. Rate of new job creation throughout private sector rose for the sixth consecutive month, but continued to be fractional. March’s Services PMI data underlines the space capacity in the country, according to Markit, as unfinished business dropped for the second continuous month. Services’ firms in India continue to be positive that activity will further expand in the following 12 months.