India’s services sector growth jumped to its highest pace in over thirteen years in July, according to a private survey.
According to S&P Global, India’s services purchasing managers’ index (PMI) grew to its highest level since June 2010 to 62.3 in July. A reading above 50 shows an expansion in the sector. The rise in PMI was attributed to “demand strength and new business gains”.
The upturn in total new orders was boosted by a pick-up in international sales.
“Service providers noted the second fastest increase in new export orders since the series started in September 2014. According to panellists, Bangladesh, Nepal, Sri Lanka and the UAE were key sources of growth,” S&P said in a statement.
“The resilience of the service sector underscores its vital role in fuelling India’s economy, with the PMI results for July so far pointing to a notable contribution from the sector to overall GDP for the second fiscal quarter,” said Pollyanna De Lima, Economics associate director at S&P Global Market Intelligence.
“Looking at PMI price indices in recent months, it seems that competitive advantage continued to support demand for Indian services, with increases in output prices here modest relative to several other nations. Although input cost inflation ticked higher in July, service providers were again cautious in their price-setting decisions amid efforts to not deter sales,” De Lima added.
According to S&P, Finance & Insurance sector was the “brightest spot” regarding business activity and new orders, topping the growth rankings in both instances.
However, it also cautioned that the overall level of positive sentiment slipped from June’s six-month high due to concerns surrounding extreme weather.
First Published: Aug 03 2023 | 10:38 AM IST