India’s Services PMI Hit 13-Years High To 62.3 On Healthy Demand

According to statistics issued by S&P Global on August 3, India's services activity rose significantly to 62.3 in July from a Purchasing Managers' Index (PMI) of 58.5 in June. According to PMI data issued on Thursday, India's dominant services sector had its strongest rise since June 2010 as overall total sales surged.

According to an S&P Global survey, "demand strength and new business wins" were accountable for an upsurge in PMI. Although the manufacturing sector PMI for India fell to 57.7 in July as against 57.8 in June, the overall S&P Global India Composite PMI Output Index reached a 13-year high of 61.9.

"Service providers noted the second fastest increase in new export orders since the series started in September 2014. According to panellists, Bangladesh, Nepal, Sri Lanka and the UAE were key sources of growth," S&P Global said in a statement.

"The resilience of the service sector underscores its vital role in fuelling India's economy, with the PMI results for July so far pointing to a notable contribution from the sector to overall GDP for the second fiscal quarter," said Pollyanna De Lima, Economics associate director at S&P Global Market Intelligence.

"Looking at PMI price indices in recent months, it seems that competitive advantage continued to support demand for Indian services, with increases in output prices here modest relative to several other nations. Although input cost inflation ticked higher in July, service providers were again cautious in their price-setting decisions amid efforts to not deter sales," De Lima added.

As a consequence, the manufacturing and services indices amalgamated to create the composite PMI, which rose to 61.9 from 59.4 in June. According to the S&P study, the Finance & Insurance sector led the growth rankings for both new orders and business activity, making it the sector with the most potential.