Services PMI at 12-yr high of 59.4 in February on strong demand and easing prices
- IBEF
- March 6, 2023
A credit rating agency S&P Global survey revealed a robust demand and an easing of pricing pressures amid minimal job creation in the nation. As a result, the Purchasing Managers' Index (PMI) for India's services sector reached a 12-year high of 59.4 in February. Since February 2011, the index has increased from 57.2 in January to 59.4 in February. From August 2021, the headline figure has been in the expansion zone for 19 straight months. Consumer services were the best-performing sector in February, recording the quickest gains in new orders and business activity. New orders placed with service providers increased further in February, with numerous firms reporting that competitive pricing benefited sales.
Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, stated that the Indian service sector more than recaptured the growth momentum lost in January, delivering the strongest expansion in almost a decade as demand resilience and competitive pricing policies backed the joint best upturn in sales during the same period. Businesses frequently noted higher expenses for food, materials, transportation and labour. Only 4% of service providers increased client fees; the majority chose to maintain selling rates.
Although employment climbed in February, extending the current expansion sequence to 9 months, the rate of job creation was only minor, as most survey respondents indicated no change in staff levels from January. According to the most recent quarterly gross domestic product (GDP) estimates provided by the Ministry of Statistics and Programme Implementation (MoSPI), the solid development in the services sector should boost prospects for Asia's third-largest economy, whose growth slowed to an annual 4.4% in October-December quarter from a 6.3% in July-September. Moreover, India's GDP is expected to grow by 7% during the fiscal year 2023-24.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
