Nikkei India Services Business Activity Index: Key Facts

The seasonally adjusted Nikkei India Services Business Activity Index report makes the following observations about the Services Business Activity in India:

  • The index witnessed a drop for the second straight month in January to 52.2 from 53.2 in December.
  • The fall indicates a softer expansion in output.
  • The growth was supported by favourable public policies, enhanced capacities and greater demand.
  • The upturn was curbed by competitive pressures and election uncertainty.
  • The report notes that a sharp and accelerated rise in manufacturing production counteracted the slowdown in activity growth across the service economy.
  • The report notes that Business activity growth in the Indian service sector cooled further at the start of 2019, amid the weakest upturn in new work since last September.
  • Optimism regarding the outlook was sustained and the companies have continued to hire. The job creation was at a three-month high
  • Even though the inflation rates remained mild by historical standards, the costs rose to a greater extent than in December.
  • There was a moderate increase in sales that was the weakest in four months. The slowdown was centred on the domestic market as new orders from abroad grew to the greatest extent since last September.

Expansion rates in the Indian service sector have been at similarly modest levels for the past four months and the data for January extends the trend. There is some sign that growth may run out of steam, in the short-term at least, as seen by the weakest improvement in demand for four months and relatively subdued optimism.

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