NEW DELHI: According to a monthly survey, India's services sector saw its strongest expansion in 12 years in February due to favorable demand conditions and new business gains.
The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.2 in January to 59.4 in February, the highest level seen in 12 years, and has remained above the neutral 50 threshold for 19 straight months, indicating expansion, the survey said.
Meanwhile, the S&P Global India Composite PMI Output Index -- which measures combined services and manufacturing output -- rose from 57.5 in January to 59 in February, highlighting a sharp and stronger rate of expansion.
The S&P Global India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. Data collection began in December 2005.
"Services firms also recorded a faster upturn in new business than their manufacturing counterparts. At the composite level, sales expanded at the joint-quickest rate in 11 years," the survey said.
"The service sector more than regained the growth momentum lost in January...as demand resilience and competitive pricing policies underpinned the joint-best upturn in sales over the same period," noted Pollyanna De Lima, economics associate director at S&P Global.
Although new business surged at its quickest rate in eight months, firms only increased hiring marginally and business confidence was the lowest in seven months.
"It seems that hiring growth was also dampened by a lack of confidence in the business environment. The degree of optimism recorded in February was...below the historical trend as some companies doubted demand would remain this resilient," De Lima added.
