Service sector returned to growth : Nikkei survey

Why in the news ?

• After the contraction in November, services sector activity returned to growth in Decemberaccording to a private sector survey.

More on news

• Nikkei India Business Activity Index, which measures services sector activity, came in at 50.9 in December from 48.5 in November, where the reading above 50 denotes an expansion.
• According to the report, Following a decline in November, the Indian service sector returned to marginal growth during December as new orders broadly stabilised.

• “Though solid overall, cost inflationary pressures also eased from November’s recent-high, whilst business expectations remained positive. Reflecting improvements in output requirements, job creation quickened to the fastest since September.” report said.
• The report further added that The turnaround in business activity stemmed from growth in information and communications and finance and insurance, with declines seen elsewhere.

Impact of GST

• Due to the improved demand conditions companies have witnessed a growth in new orders but some firms saw a decline in new contracts due to the varying impact of GST.

What is PMI ?

• PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the           manufacturing and services sectors.
• It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before. It is calculated separately for the manufacturing .and services sectors and then a composite index is constructed.
• A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction. Higher the difference from this mid-point greater the expansion or contraction. 

Source

The hindu, Economic times.