India’s services purchasing managers’ index (PMI) in October came at 58.4, According to the S&P Global Ratings. In September, it was 61, and in August, it was 60.1.
The anecdotal evidence indicated that growth was underpinned by securing of new work, favourable demand trends and positive market conditions. The positive demand for Indian services continued to support growth of business activity at the start of the third fiscal quarter.
Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said: “The Indian service economy continued to register impressive growth, despite the increases in business activity and new work intakes softening from September’s over 13-year highs. Several companies managed to secure new contracts, but some mentioned subdued demand for their services and competitive conditions.”
She added: “Exports were an area of particular strength in October, with new business gains from Asia, Europe and the US boosting growth to its second-highest in the series over nine-year history.”
In October, there were faster increases in input costs and output charges, with rates of inflation outpacing their respective long-run averages.
Pollyanna said, “Inflationary forces in the Indian service sector intensified, primarily as a result of surging food, fuel and staff costs. Although survey participants passed these additional cost burdens on to clients, permitted by demand strength, the rise in charges could have been the trigger of the deceleration in sales growth. Moreover, a pick-up in inflation expectations in October dampened business confidence.”
First Published: Nov 3 2023 | 10:52 AM IST
