India Services PMI gains momentum, business inflows highest in 3 months on sustained demand, upturn in sales | The Financial Express

India Services PMI gains momentum, business inflows highest in 3 months on sustained demand, upturn in sales

The S&P Global India Services PMI Business Activity Index grew from 55.1 in October to 56.4 in November, due to a spike in output.

India Services PMI gains momentum, business inflows highest in 3 months on sustained demand, upturn in sales
Inflows to new businesses grew at the highest rate in three months, resulting in faster output and increased creation of employment opportunities.

Indian services firms benefited from the indulgent demand conditions in November. Inflows to new businesses grew at the highest rate in three months, resulting in faster output and increased creation of employment opportunities. Due to the rise in input costs, the strongest upturn in selling charges over five years was underpinned.

The S&P Global India Services PMI Business Activity Index grew from 55.1 in October to 56.4 in November, due to a spike in output. The factors that resulted in the increased output were attributed to successful marketing campaigns, unfettered demand strength as well as an upturn in sales.

Orders placed with services providers grew for the sixteenth consecutive month, the fastest rate of expansion in over three months. Along with favorable orders from domestic sales, the Indian services sector saw a renewed interest from international buyers, resulting in increased international sales. This marks the first upturn from foreign businesses since the beginning of the pandemic.

The rate of inflation was marked and affected the companies’ operating expenses. As a result of higher transportation costs, increased expenditure on energy, commodities, paper and other essential materials, the prices charged for provisional services rose in November, as the cost burdens were partially transferred to the customers.

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Due to the increase in business optimism in November, there was a definite boost in job creation, causing employment to rise at the fastest rate in three years. Companies are expecting the demand strength to sustain through 2023, with an planned expansion in marketing costs.

Pollyanna De Lima, Economics Associate Director, S&P Global Market Intelligence, said:
“Indian service providers continued to reap the benefits of strong domestic demand, with PMI data for the penultimate month of 2022 showing faster increases in new business and output. Moreover, expectations of demand buoyancy in the medium-term promoted further job creation.”

“Whilst on the whole the latest results are encouraging, the trend for inflation is somewhat concerning. Strong demand for services again boosted firms’ pricing power, with more companies transferring cost increases to their customers. The overall upturn in input costs was sharp and little-changed from October, while output charges rose at the quickest rate in over five years,” she added.

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First published on: 05-12-2022 at 11:25 IST