India’s services activity spiked sharply to 62.3 in July from a Purchasing Managers’ Index (PMI) of 58.5 in June, according to data released by S&P Global on August 3. India’s services activity touched 62.3 in July from 58.5 in June.
India’s dominant services sector saw the fastest growth since June 2010 as the overall total sales rose, PMI data released on Thursday showed.
India’s services PMI has remained above the 50-mark, which separates growth from expansion for two years. The rise in PMI was attributed to “demand strength and new business gains”, S&P Global study said.
The PMI is a survey-based indicator based on the responses from around 400 service companies in sectors such as non-retail consumer services, transport, information, communication, finance, insurance, real estate, and business services.
The spike in PMI 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 Global said in a statement.
The S&P report noted that Finance & Insurance sector was the brightest spot regarding business activity and new orders, topping the growth rankings in both instances.
“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.
The report also cautioned that the overall level of positive sentiment slipped from June’s six-month high due to concerns surrounding extreme weather.
