Due to favorable demand conditions and a slight easing of cost constraints, August saw higher than expected growth for India’s dominant services sector. From a four-month low of 55.5 in July, the S&P Global India Services Purchasing Managers’ Index, also known as the PMI, rose to 57.2 in August, beating forecasts of 55 .0 from a Reuters poll. For the thirteenth consecutive month, it remained above the 50-point threshold distinguishing growth from contraction.
According to the survey, companies have increased hiring at the fastest rate in more than 14 years thanks to more robust new business expansion.
“Indian services activity picked up sharply midway through the second fiscal quarter, with the pace of expansion recouping some of the ground lost in July. benefit from the lifting of COVID-19 related restrictions and ongoing marketing efforts,” said Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence.
“While the rate of expense inflation was broadly similar to July, the recovery in input costs was significantly weaker. The latter rose at the weakest pace in nearly a year. “Other bright spots in the latest results. Business confidence has strengthened significantly, reaching its highest level since May 2018, while employment has grown at the fastest pace in more than 14 years,” he said. she declared.
Among sectors, “finance and insurance was the brightest area of the services economy in August, leading in sales and output growth,” the economist said.
In the April-June quarter, India’s economy grew at its fastest annual pace in a year, propelled by a strong expansion in services and manufacturing. However, other economists believe that momentum could weaken in the coming quarters due to the considerable dangers to the economy posed by rising interest rates, increased price pressures and worries. growing concerns about a global recession.
The study also found that service organizations expect production to increase over the next 12 months, with optimism hitting its highest level in more than four years.
“Outstanding business volumes of Indian service companies continued to increase in August, bringing the current streak of accumulation to eight months. The rate of expansion has been solid and the fastest in a year and a half” , says the survey.