HomeBusinessNovember services activity’s rise second fastest in a decade - Times of...

November services activity’s rise second fastest in a decade – Times of India

NEW DELHI: Activity in the country’s crucial services sector rose at its second-fastest pace in over a decade in November on the back of new orders but price pressures remained a worry in the months ahead, a survey showed on Friday.
Posting a reading of 58.1 in November, marginally lower from 58.4 in October, the India Services Business Activity Index pointed to the second-fastest rise in output since July 2011. According to monitored companies, the upturn reflected sustained increases in new work and ongoing improvements in market conditions, the survey results showed. The 50-point mark separates expansion from contraction.
The survey is compiled from responses to questionnaires sent to 400 service sector companies in the country.
The latest data comes close on the heels of numbers which showed the country’s economy grew 8.4% in the September quarter, the fastest growth recorded by a major economy. Industry, services and the farm sector provided strength to the economic recovery that began after the curbs were lifted across the country.
“The recovery of the Indian services 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. Companies were somewhat convinced that output levels would continue to increase in the year ahead, but worries regarding inflationary pressures weighed on confidence again,” said Pollyanna De Lima, economics associate director at IHS Markit.
“Looking at the manufacturing and service sectors combined, the results are even more encouraging and bode well for economic performance in the third quarter of fiscal year 2021-22 so far,” said De Lima. Some economists expect the economy to grow in double digits in the current financial year that ends in March.
Although business confidence improved to a three-month high in November, the overall level of positive sentiment was well below its long-run average. Some companies expect demand to continue to trend higher, but several others were worried that elevated inflation could dampen the recovery, the survey showed.
Amid reports of higher fuel, labour, material, retail and transportation costs, average input prices among Indian services companies rose further in November. The overall rate of inflation quickened from October and was the second-strongest in almost a decade, behind April, the survey results showed.

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