PMI: India's Service Sector Reports Growth For The First Time In 8 Months

India's services industry activity expanded for the first time in eight months in October with a surge in demand surged, but pandemic-hit firms continued to cut jobs, a private survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers' Index climbed to 54.1 in October from September's 49.8. It was the highest reading since February and comfortably above the 50-mark separating growth from contraction.

"It's encouraging to see the Indian service sector joining its manufacturing counterpart and posting a recovery in economic conditions from the steep deteriorations caused by the Covid-19 pandemic earlier in the year," said Pollyanna De Lima, economics associate director at IHS Markit in a release.

"Service providers signalled solid expansions in new work and business activity during October. They were also more upbeat about the outlook, though hopes of output growth in the year ahead were pinned on a Covid-19 vaccine," she added.

A sub-index tracking overall demand showed it expanded for the first time since February but new export business remained firmly in contraction territory as restrictions imposed across the world due to the Covid-19 pandemic hammered foreign demand, causing firms to cut jobs for the eight straight month, the longest streak on record.

The composite PMI, which includes both manufacturing and services, rose to 58.0 last month, its highest since January 2012, from September's 54.6.