Services PMI hit 13-year high in July

Services sector output rebounded from June’s three-month low to the fastest since June 2010, buoyed by strong demand and new business gains as per S&P Global

Updated - August 03, 2023 08:43 pm IST

Published - August 03, 2023 08:16 pm IST - NEW DELHI 

India’s services sector output, as measured by the S&P Global India Services Purchasing Managers’ Index (PMI), rebounded from a three-month low in June to record a 13-year high of 62.3 in July. A reading of over 50 on the index indicates an expansion in activity levels.

Output levels improved at the sharpest pace since June 2010 as per the survey-based index, with firms attributing this upturn to strong demand and new business gains. However, the pace of job creation remained “slight” and on par with the previous two months despite the higher workload as firms resorted to hiring a combination of part-time, full-time, permanent and temporary staff. 

Input costs rose at the fastest pace in 13 months, driven mainly by food, labour and transportation costs, while output prices increased at the slowest rate in three months as firms seemed to be wary of losing fresh contracts. 

New orders were revved up by an overseas spike with firms reporting the second-fastest increase in export orders since the index was introduced in September 2014, with Bangladesh, Nepal, Sri Lanka and the UAE emerging as key sources of growth. 

“The broad increases in sales across the domestic and international markets are particularly welcoming news, especially in light of the challenging global economic scenario,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.  

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