PMI: Business activity growth returns on back of surging new orders

New Delhi: The country's services sector activity in July returned to growth territory driven by new business orders that rose at fastest pace since October 2016, following which job creation picked up, a monthly survey showed. The IHS Markit India Services Business Activity Index rose to 53.8 in July from 49.6 in June, pointed to the quickest increase in output in one year.

In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. New businesses have been secured from the public and private sectors, as well as domestic and international markets, they said, adding that new export work rose for the fifth straight month. Meanwhile, the IHS Markit India Composite PMI Output Index, that maps both the manufacturing and services industry, touched an eight-month high of 53.9 in July from 50.8 in June, as aggregate new orders rose the greatest since last November.

Moreover, job creation picked up to the strongest since early-2011 in response to strengthening demand conditions and upbeat predictions for the economic outlook. The survey further noted that the July data indicated an improvement in business optimism across the service economy and companies expect advertising efforts and strengthening market conditions to support growth in the coming 12-month period.

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