Services sector sees second fastest pace of growth in Nov

The seasonally adjusted India Services Business Activity Index was at 58.1 in November, fractionally down from 58.4 in October. The November figure points to the second-fastest rise in output since July 2011.

For the fourth straight month, the services sector witnessed an expansion in output. In Purchasing Managers’ Index parlance, a print above 50 means expansion while a score below 50 denotes contraction.

“The recovery of the Indian service sector was extended to November, with a robust improvement in sales enabling the second-fastest rise in business activity in nearly ten-and-a-half years,” Pollyanna De Lima, Economics Associate Director at IHS Markit, said.

Although companies forecast higher business activity volumes over the course of the coming year, the expansion is expected to be restricted by price pressures. Amid reports of higher fuel, labour, material, retail and transportation costs, average input prices among Indian services companies rose further in November.

Meanwhile, the pandemic restrictions reportedly caused a further drop in international demand for Indian services.