economy

India services activity in October rises at fastest pace in 10 years: PMI survey

India services activity in October rises at fastest pace in 10 years: PMI survey

The recovery of the Indian service sector was extended to October with the seasonally adjusted IHS Markit India Services PMI index signalling the strongest rate of growth in ten-and-a-half years. The index rose to 58.4, from 55.2 in September as the expansion in services activity extended to three months. More jobs were created as result, the survey said, “though business confidence remained subdued due to growing concerns surrounding price pressures. With input costs again rising sharply, companies lifted their fees at the fastest pace in close to four-and-a-half years, it added. Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: “A substantial rise in prices charged for the provision of services in India had no detrimental impact on demand, as companies signalled the strongest monthly expansion in new business in over a decade. Hence, the recovery of the sector entered its third straight month, with firms scaling up activity at the fastest pace in ten-and-a-half years and creating more jobs. That said, service providers were concerned that persistent inflationary pressures could deter growth in the coming year. Business confidence remained subdued in the context of historical data. Companies expenses rose notably from September, which survey participants mainly linked to higher fuel, material, retail, staff and transportation costs, she added. The survey said that overall “private sector output in India increased at a sharper rate in October as growth quickened among both manufacturers and service providers. The Composite PMI Output Index rose from 55.3 in September to 58.7, signalling the strongest monthly expansion since January 2012. Here are other highlights of the India PMI services survey: -Output charge inflation climbs to 51-month high -October data highlighted a sixteenth successive monthly increase in input costs -New orders rise at joint-fastest pace since July 2011 -Indian firms were able to secure a healthy intake of new work despite charging more for their services. -Services companies continued to hire additional workers in October. Although moderate, the pace of job creation quickened from September to the strongest since February 2020 -Although service providers were confident that business activity would increase over the course of the coming 12 months, the overall level of sentiment was little-changed from September and well below its long-run average. -Some firms expect sales and output to increase as the pandemic recedes and marketing efforts bear fruit, but others were concerned about the impact of inflationary pressures on the recovery Download.

economy 2021-11-03 Livemint