Graphic: Mint
Graphic: Mint

PMI: Indian services providers more upbeat on business outlook than manufacturers

Nikkei's India Services Purchasing Managers' Index (PMI) slipped to 53.2 in December from 53.7 in the previous month

Nikkei’s India Services Purchasing Managers’ Index (PMI) slipped to 53.2 in December from 53.7 in the previous month. Since the manufacturing PMI also declined to 53.2 in December, it dragged the Composite PMI down to 53.6. A reading above 50 indicates expansion, while one below that threshold points towards a contraction.

However, services providers remained more confident about business outlook than their counterparts in the manufacturing sector, showed the monthly survey. The Future Output Index for services surged to a three-month high of 58.7 in December. On the other hand, optimism among goods producers moderated from mid-quarter levels.

While companies in both industries saw input cost inflation easing to multi-month lows, unlike manufacturers, services providers stepped up hiring. The employment sub-index rose from 51.6 in November to 52.7 in December. For manufacturers, it fell from 52.4 in November to 51.4 in December.

Commenting on the Indian Services PMI survey data, Pollyanna De Lima, principal economist at IHS Markit and author of the report, said, “Services companies took a breather from rising expenses as cost inflation eased to a 19-month low. This softening enabled firms to hire extra staff to a greater extent, whilst hiking their charges only marginally. With business sentiment improving for the second successive month, the service sector looks set to sustain growth in 2019 despite predictions of some sluggishness prior to the elections."