Marking a substantial resurgence, India’s services sector experienced a significant rebound in July, achieving its most robust expansion in over a decade. This impressive recovery, fueled by strong demand and noteworthy business gains, propelled the S&P Global India Services Purchasing Managers’ Index (PMI) to an unprecedented pinnacle of 62.3. The PMI, a survey-based barometer gauging activity levels within the services sector, surged to a 13-year high, underlining the sector’s remarkable vitality.
The notable upswing in July’s services sector output signifies the swiftest pace since June 2010. The survey-based index recorded an extraordinary reading of 62.3, signaling a substantial and noteworthy expansion in activity levels. This remarkable surge can be attributed to the confluence of resilient demand and notable gains in new business ventures.
Despite the augmented workload, the pace of job creation remained modest and mirrored patterns observed in the preceding two months. In response, companies adopted a multifaceted approach to staffing, encompassing part-time, full-time, permanent, and temporary personnel.
An uptick in input costs, surging at the fastest rate in 13 months, primarily driven by escalating food, labor, and transportation expenses, marked a notable facet of this growth. Nonetheless, companies approached this scenario with prudence, resulting in a more gradual upturn in output prices to safeguard newfound contracts.
Beyond domestic frontiers, overseas markets injected vigor into the sector, with companies reporting the second most rapid surge in export orders since the index’s inception in September 2014. The influx of export orders, originating from countries including Bangladesh, Nepal, Sri Lanka, and the UAE, played a pivotal role in this international upswing.
The broad-based escalation in sales, spanning both domestic and international arenas, arrived as a particularly heartening development in the midst of a challenging global economic landscape. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, conveyed her optimism regarding this positive trajectory, casting a positive light on the path ahead.
Remarkably, the headline figure of the Purchasing Managers’ Index (PMI) has consistently resided within the expansion zone for an uninterrupted span of 23 months, tracing back to August 2021.
Conducted across an extensive spectrum of sectors, the PMI survey encompassed approximately 400 companies, spanning non-retail consumer services, transport, information, communication, finance, insurance, real estate, and business services, providing a comprehensive snapshot of the services sector’s vibrant landscape.