Services PMI slows down in August
NEW DELHI : India’s services sector growth slowed down in August after registering a 13-year high in July, a private survey said, still recording one of the best sales performances over the same period at a time of elevated inflationary pressures. The S&P Global India services Purchasing Managers’ Index (PMI) fell to 60.1 in August, from 62.3 in July. The figure stood at 58.5 in June and 61.2 in May.
A Reuters poll had forecast PMI at 61 for August. A reading of 50 separates expansion from contraction. India’s services PMI has held firm in the expansion zone every month since August 2021, its longest such stretch since August 2011.
“Indian services companies achieved a remarkable milestone in August, as they welcomed a series record surge in new export business," noted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. “This spike in international demand supported one of the best sales performances recorded over the past 13 years, and acted as a catalyst for firms to expand their workforces as well as output. Demand strength also fostered a heightened sense of optimism regarding the outlook, boding well for economic growth prospects," she said.
“However, favourable demand trends also led to the joint-fastest increase in prices charged for Indian services in over six years, which may prompt attention from policymakers and potentially delay cuts to the benchmark repo rate," she added. India’s services sector, one of the fastest growing in the world, contributes to over 50% of the country’s GDP. According to S&P, Indian firms noted a widespread upturn in services exports to several geographies including Asia Pacific, Europe, North America and the Middle East.
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