India's service sector growth weakens to a three-month low in June
The S&P Global India services Purchasing Managers' Index (PMI) fell to 58.5 last month from 61.2 in May. Data on Tuesday showed that India's manufacturing PMI fell to 58.7 in June from 57.8 in May. As a result, India's composite PMI reading retreated to 59.4 in June from 61.6 in May.
India's services PMI reading has been above breakeven for nearly two years, the longest stretch since August 2011. Sustained growth in the sector, which accounts for around 60% of overall output, indicates Asia's third-largest economy will continue to outpace many of its major peers over the coming quarters. «Demand for Indian services continued to surge higher in June, with all four monitored sub-sectors registering quicker increases in new business inflows,» noted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
«This bullish pick-up in growth momentum supported a further sharp upturn in business activity and encouraged another uplift in employment figures, boding well to near-term growth prospects.» A new business sub-index, a proxy for overall demand, rose to 58.8 last month from 58.4 and services firms added jobs for a 13th consecutive month. Business optimism was at its highest so far this year. However, the slowing global economy dragged export growth to a three-month low.
Meanwhile, services firms raised prices charged at their sharpest rate since July 2017 despite slowing input cost inflation. «Service providers experienced a retreat in cost pressures, although business expenses rose again amid higher food and wage costs… Combined with manufacturing, output prices across the private sector increased at the sharpest pace in over a decade,» added De Lima. (With agency inputs)
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