Services PMI rises to a 10-month high of 53.6 in December

New Delhi: India's services sector rebounded from flat activity in November and showed an encouraging growth in December, with the Nikkei Services Purchasing Managers' Index (PMI) climbing to a ten-month high of 53.6, compared with 50.1 last month.

A reading above 50 shows a growth in activity, while a reading below it shows a contraction.

The data for December "was indicative of a solid expansion in output across the sector. Sub-sector data indicated that output rose in four of the six broad areas of the service economy, the exceptions being Hotels & Restaurants and Transport & Storage," said the statement released by Markit, a financial information services provider.

"The best-performing categories in December were ‘Other Services’ and Financial Intermediation. Leading services activity to increase was a solid rise in incoming new work, one that was faster than that seen in November. Anecdotal evidence highlighted strengthening demand conditions," the release said.

 “The Indian private sector returned to expansion territory at the end of 2015, eking out modest output growth in December. A stronger rise in new business and an improvement in year-ahead expectations at service providers are positive developments, but the overall health of the economy remains fragile amid a weak manufacturing sector," said Pollyanna De Lima, economist with Markit.

The Nikkei Manufacturing PMI released on Monday fell to a 28-month low in December to 49.1 points from 50.3 in the previous month, as business conditions deteriorated on account of Chennai floods besides the persistently muted domestic demand.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.