The S&P Global India Services PMI for the month of October printed at 55.1 showing signs of recovery, rising from September levels of 54.3, a six-month low. The figure came in above the neutral threshold of 50 for the fifteenth month in a row. Domestic markets surfaced as the main source of the business expansion in October. The seasonally adjusted Services PMI was buoyed by the improvement in business confidence and recovery in new work, with service providers supporting hiring activity, the S&P report noted.
“The October results show us that service providers had no trouble securing new work in October, despite lifting their charges again. Hence, the sector remained firmly inside expansion territory as business activity and payroll numbers were raised to support strengthening demand,” said Pollyanna De Lima, Economics Associate Director, S&P Global. Lima also highlighted the boost in job creation triggered by optimism towards a more positive environment. “Sentiment towards the year-ahead outlook for business activity improved to the highest in close to eight years,” Lima added.
The S&P report added that consumer services led the growth of business activity, employment, and new orders at the sub-sector level. Following the consumer services was the finance and insurance sector aiding the growth. The least contribution was made by transport, information and communication, which were placed at the bottom of the list. The overall expenses in October saw an uptick, on the back of rising food, fuel, and retail prices.
“Many companies indicated that higher food, fuel and retail prices pushed up their overall expenses in October. With some of this additional cost burden shared with customers, prices charged for the provision of services likewise rose. Rates of input cost and output charge inflation quickened from September and were above their respective averages,” Lima said in the report.
Private Sector Picks Pace
The report noted a mild acceleration in the private sector activity. The S&P Global India composite PMI output index came in at 55.5 in October, as compared to 55.1 in the previous month. Factory orders rose at a stronger rate than sales. Growth of new orders were reported to be at a two-month high in October.