India’s services PMI for December showed an improvement with a quicker upturn in new business, according to S&P Global. The services industry saw activity increase at the fastest pace in six months during December 2022 amid robust demand. More jobs were created and companies remained strongly upbeat towards year end outlook. This was despite the sharp rise in companies’ expenditures. S&P Global India Services PMI Business Activity Index roe from 56.4 in November to 58.5 in December. This shows the strongest rate of expansion since mid-2022. “As we head into 2023, companies signalled strong optimism towards the outlook for output,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

S&P Global said that the Indian service providers readjusted their capacities to accommodate for rising new business via further recruitment drives in December and the pace of job creation was above its long-run average. Further, it said that the Indian private sector firms showed a strong performance at the end of 2022 with manufacturers and service providers recording faster expansions in output. According to the S&P Global India Composite PMI Output Index, Indian private sector firms showed the quickest rate of growth since January 2012, rising from 56.7 in November to 59.4 in December.

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However, with capacity pressures remaining mild, job creation across the private sector slowed to a five-month low. At the composite level, the rate of inflation was at a two-month high and above its long-run average. “Positive sentiment and ongoing growth of new business continued to support job creation, but there were areas where capacities were reportedly adequate to cope with current requirements,’ added De Lima.

The finance and insurance segment was the best performing sectors and showed the quickest increase in output while real estate and business services saw the slowest expansion in new orders. While the business received by Indian services increased for the 17th month in a row this December, the rate of expansion remained the fastest since August.