Services sector activity shot up to a near two-year high in March led by a sharp uptick in demand.

Nikkei India Services Business Activity Index rose to its highest level since June 2014 at 54.3 in March as against 51.4 in February.

According to sub-sector data, service activity grew in all five of the six industries surveyed, except for transport and storage.

Similarly, the Nikkei India Composite PMI Output Index also jumped to a 37-month high of 54.3 in March from 51.2 in February.

A reading above 50 on the PMI denotes expansion while that below 50 indicates contraction in activities.

“March PMI surveys signalled a reassuringly robust end to the financial year for the Indian economy, with sharper increases in new business spurring activity growth in both the manufacturing and service sectors,” said Pollyanna De Lima, economist at Markit, which compiles the survey, adding that the only disappointment was the little change in employment trends.

Purchase price inflation among goods producers was at a three-month high. Tariffs were also raised at a slightly faster pace than February and service providers passed on a part of the cost increase to customers with the improving demand environment.

Services companies in fact, remained optimistic of further increase in activity over the next 12 months. The level of confidence was linked to favourable government policies and forecasts of a pick-up in demand.

comment COMMENT NOW