The services sector expanded at its fastest pace in 18 months in August amid strong inflows of new work and improved demand conditions, a monthly survey said.

The seasonally adjusted India Services Business Activity Index rose from 45.4 in July to 56.7 in August, as the reopening of several establishments and increased consumer footfall provided a boost to sales. The services sector witnessed the first expansion in output in four months and a rebound in business confidence. In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

“The sharp rise in India’s services and composite PMI readings in August support our view that the economy has staged a strong rebound in Q2. But downside risks remain as the threat of further virus waves continues to loom,” Darren Aw, Asia economist, Capital Economics, said.

“The Indian service sector bounced back in August, led by the reopening of several establishments and improved client confidence because of growing vaccine coverage,” said Pollyanna De Lima, Economics associate director at IHS Markit. New orders placed with service providers rose in August, ending a three-month sequence of reduction.