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India’s service sector growth expands at fastest rate in February
Mar-03-2021

The growth of India’s service sector expanded at the fastest rate in the month of February, owing to a quicker increase in new orders. Moreover, the roll-out of coronavirus disease 2019 (COVID-19) vaccines led to an improvement in business confidence towards growth prospects.

As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 55.3 in February from 52.8 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also jumped to 57.3 in February from 55.8 in January.

Despite ongoing growth of total new business, service sector employment fell further during February. A number of companies suggested that the COVID-19 pandemic restricted labour supply. The pace of job shedding accelerated from January, but was moderate overall.

On the price front, overall input costs increased in February, amid reports of higher freight, fuel and retail prices. Furthermore, the rate of inflation accelerated to the strongest since February 2013. However, competitive pressures prevented companies from lifting their own fees.

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