PMI: The service sector has grown tremendously in January

Indian service providers addressed new business inflows and rising backlogs by expanding workforces for the fifth consecutive month in January. Moreover the rate of job creation was the fastest since last September

The headline IHS Markit services PMI fell to 53 in January, down from 54.2 in December and missing forecasts of a rise to 54.3.

Any reading above 50 signals growth, but this was the weakest rate of expansion recorded since September 2016.

Chris Williamson, chief business economist at IHS Market, said: "A slowdown in the service sector comes as a disappointment, though was partially offset by faster manufacturing growth during the month".

Strength in both the manufacturing and services industries supported the Caixin China Composite Output Index, which covers both manufacturers and service providers, to jump to a seven-year high of 53.7 in January.

On the other hand, the services sector growth picked up during the same period as PMI climbed to 51.7 from 50.9 and lifted jobs, revealed the survey published by the Tokyo-based research firm on Monday.

The downbeat economic data comes ahead of Thursday's Bank of England Monetary Policy Committee vote, which is expected to hold interest rates at 0.5 per cent.

The survey also showed businesses were the most optimistic about future activity in 56 months, with firms citing planned new store openings and forecasts of continued solid economic growth.

United Overseas Bank (Malaysia) Bhd senior economist Julia Goh said the improved PMI reading for Malaysia is in tandem with the gains across most regional PMI readings in January. In November, the index had stood at 48.5.

He added that the latest readings were consistent, on historical patterns, with GDP slowing to 0.3 per cent in the first quarter of 2018, down from the official estimate of 0.5 per cent growth in the final quarter of 2017.

There has been an upsurge in the Indian service sector with it expanding in January.

The inflation in input prices in the services industry rose by its steepest level since April 2012 in January, the survey showed.

Business confidence was the highest since March 2017.

That had sparked a shift in expectations about United Kingdom interest rates, with investors raising bets on a hike as early as May.

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