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5
February 2018
 |
PMI
(The Total Investment & Insurance Solutions)
The latest figure of 51.7, up from 50.9 in December, signaled a faster expansion albeit one that remained below the long run survey average.
The Information & Communication sub sector continued to drive overall growth in the latest period. As manufacturing production growth eased from December’s 60 month high, the Nikkei Composite Output Index fell to 52.5 in January from 53. The Total Investment & Insurance Solutions
Overall, this was consistent with a modest improvement in operating conditions across the private sector as a whole. Having been unchanged in December, the volume of new business received by Indian service sector companies rose in January. The Total Investment & Insurance Solutions
The pace of expansion was the sharpest since last June, but below the trend level since the series began in December 2005. Meanwhile, new orders rose for the third consecutive month at manufacturing companies. The rate of growth was solid despite easing from January’s 14-month high.
The latest survey data signaled that capacity constraints remained evident across both the manufacturing and service sector, as the volume of outstanding business rose for the twentieth successive month.
Higher backlogs partly reflected delayed customer payments for orders. Indian service providers addressed new business inflows and rising backlogs by expanding workforces for the fifth month running in January. Moreover, the rate of job creation was the fastest since last September. Reflecting improved demand conditions, manufacturers raised their payroll numbers for the sixth consecutive during January. The Total Investment & Insurance Solutions
Job creation slowed to the weakest since last October, but remained above the series trend. Service sector input price inflation stabilized at a moderate pace in January, remaining below the long run survey average. That said, costs rose sufficiently to generate another increase in prices charged by service providers, with those in the Information & Communication sector registering the strongest inflation of charges. The Total Investment & Insurance Solutions
Indian manufacturers registered a further marked increase in their average cost burdens during January. Subsequently, manufacturing companies reportedly raised their output charges to pass on higher input costs to consumers.
Service sector companies in India remained optimistic regarding expected activity levels in 12 months’ time. Sentiment eased to a 3- month low but was solid overall. Reflecting the trends for activity and new business, Information & Communication was the most optimistic sub sector in January.
As was the case with the service sector, firms retained positive projections for output over the next 12 months, but the level of confidence remained weak by historical standards. The Total Investment & Insurance Solutions
Commenting on the Indian Services PMI survey data, Aashna Dodhia conomist at IHS Markit, and author of the report, said “The recovery across India’s service sector continued during January, with growth in output picking up to the joint-strongest since June 2017 as underlying demand conditions improved. That said, the overall performance of the service sector remained weaker than the long-run growth trend. The Total Investment & Insurance Solutions
“Input cost inflation across the service sector remained weak by historical standards, although service providers were able to pass on a greater proportion of cost burdens to customers.
“Meanwhile, job creation accelerated to the second strongest in over six-and-a-half years, but, as firms struggled in receiving timely payments, the Goods and Services Tax (GST) continued to be a key constraint to businesses and the service sector remained a laggard relative to its manufacturing counterpart.The Total Investment & Insurance Solutions
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