The Purchasing Manager’s Index (PMI) of India’s service sector reached 61, reflecting strong sales growth
- IBEF
- October 6, 2023
India's services sector growth continued to pick up steam in September, producing strong sales results as a result of rising demand and the ensuing increase in output and sales. The S&P Global India Services Purchasing Managers' Index (PMI) increased from 60.1 in August to 61 in September. In July, it was 62.3; in June, 58.5; and in May, 61.2.
A reading above 50 hits an expansion in activity, while a number below suggests a contraction. India’s services PMI has held firm in the expansion zone every month since August 2021, its longest such stretch since August 2011.
According to Mrs. Pollyanna De Lima, Economics Associate Director, S&P Global Market Intelligence, the latest PMI results brought more positive results for India’s economy, with September seeing business activity and new work intakes rising to one of the greatest extents in over 13 years. Moreover, an upturn in business optimism about the year ahead, fuelled by buoyant demand conditions, bodes well for further growth across the service sector. Over 50% of India's GDP comes from the services sector, one of the fastest expanding in the world.
S&P reports that Indian businesses have seen an increase in foreign demand, particularly from clients in Asia, Europe, and North America. Despite dropping to a three-month low, the overall growth rate was still one of the fastest in the series' history (since September 2014).
The S&P Global India Services PMI is created using data from surveys that were distributed to roughly 400 service-related businesses. According to the survey, input cost inflation significantly decreased in September, with the pace of growth being one of the lowest since late 2010.
Some businesses choose to pass on further cost increases to their customers by boosting selling prices. Others claimed that prices remained the same while efforts were made to attract new clients, states the report. The PMI data is an indicator of the health of the economy.
Government statistics show that the Indian economy grew by 7.8% in the first quarter of the current fiscal year due to stronger capital spending by the government and the private sector as well as robust services growth. India's GDP increased by 6.1% from January to March 2023, which raised the annual growth (for FY23) projection from 7% to 7.2%.
S&P Global issued its survey on India's Purchasing Managers' Index (PMI) for manufacturing for August, which increased at the slowest rate in five months at 57.5. The manufacturing and services indices together make up the composite PMI, which increased to 61 in September from 60.9 in August as a result of greater service sector sales.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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