Activity in India’s dominant services sector gathered pace last month, driven by an upturn in business activity and the sharpest rise in employment in over 14 years amid easing cost pressures.
(Bloomberg) — Activity in India’s dominant services sector gathered pace last month, driven by an upturn in business activity and the sharpest rise in employment in over 14 years amid easing cost pressures.
S&P Global India Purchasing Managers Index for services rose to 57.2 in August from a four-month low of 55.5 in July. A number above 50 shows expansion, while a print below that shows contraction in activity.
“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.
Improved demand outlook, easing cost pressures and the ability of service providers to pass on price hikes aided optimism, with sentiment rising to its highest level in over four years. Meanwhile, input costs rose at the slowest rate in 11 months as companies raised their selling prices in August to protect margins amid rising food, fuel and labor costs, the survey showed.
Global commodity prices have fallen from their peak earlier this year as central banks’ hawkish resolve stir up market fears about rising rates stifling demand for raw materials.
Services companies expect output growth over the coming 12 months, with sentiment rising to its highest level in over four years, according to the survey. The upbeat growth projections also underpinned a substantial increase in payroll numbers across the service sector, pushing the rate of job creation to the strongest in over 14 years, S&P Global said.
The acceleration in services activity, that makes up more than half the economy, pushed the composite index to 58.2 in August from 56.6 in July, its 13th month of expansion. Meanwhile, data last week showed August manufacturing PMI stood at 56.2 in August from 56.4 in July.
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