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The Nikkei Services Business Activity Index registered its fastest rise in three months in January to stand at 51.7, led by expansion in the Information & Communication sub-sector. The index stood at 50.9 in December 2016. A reading above 50 on the index indicates expansion, while one less than that shows a decline.
“The Indian service sector remained in expansion mode in January, driven by a renewed increase in new business,” the Nikkei said on Monday, adding that growth rates for activity and employment have accelerated since December. However, the Nikkei Composite Output Index fell to 52.5 in January from 53 in December, reflecting the muted growth in manufacturing activities.
“The recovery across India’s service sector continued during January, with growth in output picking up to the joint-strongest since June 2017 as underlying demand conditions improved,” said Aashna Dodhia, Economist at IHS Markit, and author of the report but cautioned that the overall performance of the service sector remained weaker than the long-run growth trend. The data comes just ahead of the meeting of the Monetary Policy Committee, which will take a call on interest rates on February 7.
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