India’s services PMI in December
According to data provided by Markit Economics, the final Markit services PMI (purchasing managers’ index) for India strengthened in December 2017. It stood at 50.9 in December 2017 compared to 48.5 in November, and it beat the preliminary market estimate of 50.0.
The services PMI entered the expansion zone after its services activity contracted in November.
The stronger services PMI in December was due to the following factors:
- Production volume and output showed strong improvement in December compared to November 2017.
- New business orders also stabilized in December after declining strongly in November 2017.
- The employment levels in the service sector improved in December 2017.
Economic impact and market performance
After the implementation of GST (goods and services tax) in July 2017, the service industry showed a huge fall in performance. Confusion about the tax rate among consumers and businesses subdued domestic orders and export orders during the past five months.
However, the situation is improving. December’s services PMI report showed strong improvement in the export orders, which pushed up the overall service activity in the economy.
In the previous article, we saw that India’s (INDA) equity market showed strong improvement in December 2017. India’s NIFTY 50 index rose 3.0% during the month.
In the next part of this series, we’ll analyze the performance of China’s manufacturing PMI in December 2017.