India’s dominant services industry has demonstrated a surge in economic activities for the first time in eight months in the month of October as the market demands showed an upwards trend. Although firms affected by the economic slump during the pandemic are still continuing to cut jobs.
The survey results, coupled with a similar survey on Monday depicted a constant expansion in India’s manufacturing growth, the fastest it had witnessed in over a decade and this suggested that an economic revamp in Asia’s third-largest economy is constant.
The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 54.1 in October from September’s 49.8 and became the highest reading since February and was resting above the 50-mark separating the growth from contraction.
“It’s encouraging to see the Indian service sector joining its manufacturing counterpart and posting a recovery in economic conditions from the steep deteriorations caused by the COVID-19 pandemic earlier in the year,” Pollyanna De Lima, economics associate director at IHS Markit emphasised in a release.
“Service providers signalled solid expansions in new work and business activity during October. They were also more upbeat about the outlook, though hopes of output growth in the year ahead were pinned on a COVID-19 vaccine,” she added.
A sub-index which tracks the overall demand depicted that it spurged for the first time since February but new export business remained in a state of contraction as the restrictions imposed across the globe in the wake of the pandemic have restricted foreign demand. This has led the firms to cut out on jobs for eight months straight making it the longest slump ever recorded.
“Survey participants indicated that workers on leave had not returned and that a widespread fear of COVID-19 contamination continued to restrict staff supply,” De Lima stated while commenting on the slump.
The composite PMI, which includes both manufacturing and services, rose to 58.0 in October from September’s 54.6 becoming the highest PMI recorded since January 2012.