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Services sector growth at 7-year high

Like the manufacturing sector, the Indian services sector showed a strong uptick in January 2020, with rising demand fuelling the sharpest increases in new orders and output in seven years, according to the IHS Markit India Services Business Activity index. The index rose 55.5 in January, from 53.3 in December, the strongest growth in seven years. The survey attributed this rebound largely to favourable market conditions and better underlying demand. Commenting on the latest survey results, Pollyanna de Lima, principal economist at IHS Markit, said: “The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on to the momentum gained at the end of 2019. Strong domestic demand led to expansions in new business and output not seen for seven years.” He further added, “With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012.” However he also cautioned about inflationary pressure, given the sharpest increase in input prices in just under seven years.”