India: Services employment ticking higher – Nomura

Analysts at Nomura note that India’s employment sub-index of the services PMI was steady at ~50 over 2014- 16, but picked up to an average of ~51 in 2017 and further to 52.5 so far in 2018 (January-July).

Key Quotes

“The turnaround has coincided with the period after demonetisation and the uptrend in employment has accelerated further after the implementation of the goods and services tax (GST).”

“Improved staffing levels may simply reflect rising demand; indeed, the employment index was at similar levels during the 2009-10 recovery.”

“The jobs uptick suggests a strong recovery in demand in the services sector and is consistent with higher services price inflation.”