Indian service providers enjoyed a welcome upturn in demand during July, with a faster increase in new business underpinning stronger growth of output and boosting confidence.

At 51.9 in July, the seasonally adjusted Nikkei India Services Business Activity Index posted above the no-change mark of 50.0 for the thirteenth month running, highlighting ongoing growth of output in the sector. Up from 50.3 in June, the headline index was at a three-month high and indicative of a modest rate of expansion.

July data highlighted a second successive monthly increase in unfinished business volumes at Indian service providers. The rate of accumulation was moderate, but above the long-run survey average.

At manufacturers, work -in-and rose at the fastest pace in one-and-a-half years. Higher backlogs were linked by private sector firms to delayed payments from clients.

Commenting on the Indian Services PMI survey data, Pollyanna De Lima, economist at Markit, which compiles the survey, said: "The Indian service economy started the second semester on a solid footing, posting its strongest performance since April and thereby indicating that underlying demand conditions remained reasonably firm.

Nevertheless, growth remains below-par compared with the long-run survey trend and, although expansion has been sustained for 13 consecutive months, the sector has so far failed to generate jobs

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