Activities in the Indian services sector eased in January but continued to remain above its long run average.
The seasonally adjusted S&P Global India Services PMI Business Activity Index eased to 57.2 in January 2023 from 58.5 in December, highlighting the strongest rate of expansion since mid-2022, signalling an 18th successive monthly rise in output, according to a media statement. A reading above 50 indicates expansion in business activity.
The Composite PMI Index fell from December's 59.4 to 57.5, but remained above its long-run average.
The upturn was associated with favourable demand conditions and ongoing increases in new work.
Underlying data suggested that the rise in total new business was centred on the domestic market, as international orders decreased. Outstanding business volumes rose for the 13th month running in January, and at the quickest rate since last August. That said, the latest accumulation was moderate as fewer than 3% of firms saw growth and the remaining no change.
The overall rate of job creation was fractional and the joint-weakest in the current eight- month sequence of expansion.
Services companies noted a further increase in their expenses during January, which they attributed to higher costs for a wide range of materials, food and staff. Whilst remaining above its long-run average, the rate of inflation softened to a two-year low.
Similarly, prices charged for the provision of services rose at a softer pace in January. The latest rise was the slowest since March 2022 and below the average seen since the survey started in December 2005.
Some panel members indicated that demand strength enabled the transfer of cost increases to clients, but several firms opted to absorb additional cost burdens instead of hiking their fees amid attempts to boost sales.
Marketing initiatives, expanded capacities and predictions that demand will remain strong in the year ahead underpinned optimism towards growth prospects.
However, the overall level of positive sentiment fell to a six-month low as the vast majority of panellists forecast no change in activity from current levels, as per the survey.
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