India's Services PMI Rises To 55.1 In October

A gauge of India's services sector signaled growth for the 15th consecutive month and outpaced its long-run average, while business confidence, too, rose. However, inflationary pressures continued to gather pace.

The India Services Business Activity Index, stood at 55.1 in October from 54.3 in September, pointing to a quicker rate of growth, according to a media statement. A reading above 50 indicates expansion in business activity.

The Composite PMI Output Index stood at 55.5 in October against 55.1 the month before.

Favourable demand for services continued to underpin increases in new business and output at the start of the third fiscal quarter, the release stated. Moreover, rates of expansion quickened from September's six-month lows.

Buoyed by the ongoing recovery in new work, employment rose for the fifth month in a row and at the second-fastest pace in over three years.

Underlying data suggested that the domestic market was the main source of new business gains, as foreign sales decreased further at the start of the third fiscal quarter. Monthly deteriorations in international demand have been registered since the onset of Covid-19 in March 2020, the release stated.

The latest results also showed mild accelerations in inflation rates for input costs and output charges. Indian services companies reported greater operating expenses in October, stretching the current sequence of inflation to 28 months. The latest increase was the most pronounced since July and historically marked. Anecdotal evidence indicated that food, fuel and retail prices rose since September.

Overall, confidence was at its highest level in just under eight years, according to the release.