New business and output requirements continued to grow steadily to support job creation in the service economy. Photo: Bloomberg News
The India Services Purchasing Managers' Index rose to 55.1 in October from 54.3 in September on strong gains in new business and rise in hiring amid strong demand.
New Delhi: India's services sector picked up pace in October with the Purchasing Managers' Index (PMI) hitting a six-month low in September on strong gains in new business and a rise in hiring amid strong demand, a private company said in a statement. The survey showed up on Thursday. ,
The S&P Global India Services Purchasing Managers' Index rose to 55.1 in October, from 54.3 in September. A reading above 50 indicates expansion in activity while a sub-50 print indicates contraction.
Favorable demand for services continued to dampen growth in new business and production at the start of the third fiscal, the release said. In addition, expansion rates accelerated from six-month lows in September.
Buoyed by the ongoing improvement in new jobs, employment grew for the fifth straight month and the second fastest pace in three years.
The underlying data suggested that the domestic market was the main source of new business gains, as overseas sales contracted further at the start of the third fiscal quarter. The release said that since the onset of COVID-19 in March 2020, there has been a monthly decline in international demand.
“October results showed that there was no problem in getting new work in October despite re-charging service providers. Therefore, the sector remained firmly within the expanding sector as business activity and payroll numbers were raised to support strong demand," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.
Job creation in the services sector picked up and business expectations were at an almost eight-year high. According to the survey, continued growth in new business and production requirements continued to support job creation in the service economy.
"Optimism towards a more positive environment boosted job creation in October, as service providers sought to adjust capacity to account for the expected increase in new work. A sense of the year-ahead outlook for business activity in nearly eight years." The highest has improved,” Lima said.
On the inflation front, the survey said inflation rates for input cost and output charges have moderated.
“Several companies indicated that higher food, fuel and retail prices pushed up their overall spending in October. The prices charged for the provision of services similarly increased, with some of this additional cost burden shared with the customers. Input cost and output charge inflation rates accelerated since September and were above their respective averages," Polina de Lima said.
New business and output requirements continued to grow steadily to support job creation in the service economy. Employment grew for the fifth month in a row and at the second fastest pace in three years (since August).
The overall S&P Global India Composite PMI Output Index rose to 55.5 from 55.1 in September as activity in both manufacturing and services remained strong.
"Private sector activity in India picked up marginally, as strong growth in the service economy more than offset the slowdown among goods producers," the report said.
The S&P Global India Services PMI is compiled from questionnaire responses sent by S&P Global to a panel of approximately 400 service sector companies. Based on contribution to GDP, the panel is stratified by sector and workforce size of the company. Data collection began in December 2005.
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