ASIA BUSI­NESS Nov ser­vices grow at four-month high

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BEN­GALURU — Busi­ness ac­tiv­ity in In­dia’s dom­i­nant ser­vices sec­tor ex­panded in Novem­ber at the quick­est pace in four months, lifted by a sig­nif­i­cant rise in do­mes­tic de­mand, a pri­vate sur­vey showed yes­ter­day.

This will of­fer some re­lief to Asia’s third- largest economy, which last week re­ported slower eco­nomic growth in the Ju­lySeptem­ber quar­ter.

The Nikkei/IHS Markit Ser­vices Pur­chas­ing Man­agers’ In­dex rose to 53.7 last month from 52.2 in Oc­to­ber, its high­est since July and above a Reuters poll con­sen­sus of 52.5.

The in­dex has been above the 50- mark that sep­a­rates growth from con­trac­tion for six straight months.

Pollyanna De Lima, a prin­ci­pal econ­o­mist at IHS Markit, said the wel­come news “com­ple­ments sim­i­lar up­beat re­sults” in the man­u­fac­tur­ing in­dus­try, is­sued ear­lier in the week, and sug­gest the pri­vate sec­tor economy “will pro­vide im­pe­tus” to In­dia’s Q3 fis­cal year 2018 GDP re­sults.

The sub- in­dex for em­ploy­ment showed ex­pan­sion for a 15th straight month, though jobcre­ation was at the slow­est pace since Septem­ber.

In the lat­est sur­vey, the new busi­ness or­ders sub- in­dex, a proxy for do­mes­tic de­mand, rose to a four- month high of 53.3 in Novem­ber but for­eign de­mand for In­dian ex­ports con­tracted for the first time in six months.

Stronger ser­vices ac­tiv­ity and bet­ter- than- ex­pected growth in man­u­fac­tur­ing pushed a com­pos­ite in­dex from Oc­to­ber’s 53 to 54.5 – its high­est since over 80 per cent of In­dia’s cur­rency in cir­cu­la­tion was wiped out by the gov­ern­ment in late 2016.

De­spite in­put cost in­fla­tion eas­ing to a seven- month low in Novem­ber, stronger busi­ness de­mand let firms raise prices more steeply and im­prove mar­gins, pos­ing up­side risks to in­fla­tion.

Ac­cord­ing to a sep­a­rate Reuters poll, the Re­serve Bank of In­dia (RBI) will hike in­ter­est rates once next year, af­ter rais­ing them twice so far in 2018. — REUTERS

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