India Services PMI Expands from 55.5 in July to 57.2 in August, 22

The S&P Indian Services PMI increased to 57.2 in August, 2022 from its 4-month low of 55.5 in the month of July .The Indian services PMI has shown a sharp rate of expansion in the month of August and is expected to grow as the new businesses growth picks up in manufacturing.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: "There were many positives in the latest results. Business activity continued to rise strongly, with a similarly robust uplift in new business as the offering of new services and marketing efforts bore fruit. "There was, however, a noticeable loss of momentum for the Indian service economy as demand was somewhat curtailed by competitive pressures, elevated inflation and unfavourable weather. Both output and sales increased at the weakest rates for four months. "In line with concerns that economic growth has weakened as we enter the second fiscal quarter, service providers signalled subdued confidence towards the medium-term business outlook. Only 5% of panellists forecast output growth over the course of the coming 12 months, while 94% predict no change from present levels. "The subtle easing in cost inflationary pressures to a five-month low was also welcomed by services firms struggling to preserve margins, and contributed to a softer rise in prices charged. Yet, survey participants again reported considerable strain from food, fuel, input, labour, retail and transportation costs."

According to the report, new business inflows increased at a marked rate that was nevertheless the slowest in four months. Service providers that reported higher sales mentioned favourable demand conditions and fruitful advertising. Growth was dampened by fierce competition and unfavourable weather, according to survey participants.