India's services sector saw improvement in August, gains in new business, ongoing improvements in demand conditions and job creation. The seasonally adjusted S&P Global India Services Purchasing Managers' Index (PMI), for August, stood at 57.2, up from four-month low of 55.5 hit in July.
Indian service providers welcomed a stronger expansion in new work intakes with a quicker upturn in business activity and the sharpest rise in employment for over 14 years.
The Business Activity Index highlighted a rebound on stronger gains in new business, ongoing improvements in demand, job creation and overtime work. Forecasts regarding the year-ahead outlook for output were revised higher, with optimism at its greatest degree since May 2018. Complementing the uptick in growth was a slower increase in input costs during August.
A PMI score above 50 indicates expansion, while a score below 50 indicates contraction.
"The pick-up in growth stemmed from a rebound in new business gains as firms continued to benefit from the lifting of COVID-19 restrictions and ongoing marketing efforts," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
Lima further noted that "with demand showing considerable resilience, service providers maintained a degree of pricing power and lifted selling prices amid the transfer of cost increases to customers. "While the rate of charge inflation was broadly similar to July, there was a considerably softer upturn in input costs. The latter rose at the weakest pace in close to a year."
The Reserve Bank of India's Monetary Policy Committee had raised the benchmark lending rate by 50 basis points to 5.40 percent early in August. The next meeting of the MPC is scheduled for September 28-30, 2022.
(With Agency inputs)
First Published: Sept 5, 2022 12:01 PM IST
