Service activity sees fastest growth rate in 12 years in February 2023

The S&P Global India Services Purchasing Managers Index Business Activity Index increased from 57.2 in January to 59.4 in February this year

March 6, 2023

The service sector more than regained the growth momentum lost in January

Consumer services outperformed the other three sub-sectors

Transport, information, communication, finance, insurance, real estate, and business services, registered the fastest increase in new orders

While firms indicated that competitive prices boosted sales, the rate of input price inflation moderated to a 29-month low, which helped provide a fillip to the service activity

India’s service activity experienced its fastest growth rate in 12 years in February 2023, driven by favourable demand conditions and new business gains, according to The S&P Global India Services PMI Business Activity Index. It increased from 57.2 in January to 59.4 in February.

The expansion has been indicated for the 19th consecutive month as the headline figure has remained above the neutral threshold of 50. A reading above 50 signifies growth.

Experts said that the service sector regained the growth momentum lost in January, as demand resilience and competitive pricing policies underpinned the joint best upturn in sales over the same period.

Consumer services outperformed the other three sub-sectors, with transport, information, communication, finance, insurance, real estate, and business services, registering the fastest increase in new orders. 

While firms indicated that competitive prices boosted sales, the rate of input price inflation moderated to a 29-month low, which helped provide a fillip to the service activity. Only 4% of the 400 service sector companies surveyed by S&P Global transferred cost increases to clients, leading to selling charge inflation falling to a 12-month low. Despite service activity reaching a 12-year high, job numbers remained unchanged, as firms reported only mild pressure on capacity. The PMI composite index also showed a sharp rise in private sector output to 59 in February from 57.5 in the previous month.

Source: Economic Times

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