India's Services PMI Expands At Its Fastest Pace In 13 Years In July
India's services sector continued to perform well in July, as total sales increased at their fastest rate since June 2010, aided by a substantial improvement in international demand, a private survey showed.
The seasonally adjusted S&P Global India Services PMI Business Activity Index stood at 62.3 compared with 58.5 in June, according to S&P Global. A print above 50 means expansion, while a number below 50 indicates contraction.
The composite PMI rose from 59.4 in June to 61.9 in July.
The upturn was largely attributed to demand strength and new business gains, the release stated. The upturn in total new orders was boosted by a pick-up in international sales.
Looking ahead, companies continued to predict higher activity levels. That said, concerns over extreme weather somewhat dampened optimism.
The resilience of the service sector underscores its vital role in fuelling India's economy, with the PMI results for July so far pointing to a notable contribution from the sector to overall GDP for the second fiscal quarter.Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence
July data also signalled a further increase in input costs facing Indian service providers. Moreover, the rate of inflation quickened to a 13-month high, the release said. Monitored companies signalled greater food, labour, and transportation costs, which in turn lifted selling charges.
Service sector employment expanded at a slight pace that was broadly similar to that seen in the prior two months.
When assessing the year-ahead outlook for business activity, service providers on average were optimistic. Growth expectations stemmed from forecasts of demand strength and marketing initiatives. The overall level of positive sentiment slipped from June's six-month high, however, owing to concerns surrounding extreme weather.
Looking at the sub-sector data, finance and insurance were the brightest spots regarding business activity and new orders, topping the growth rankings in both instances.
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