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Services sector activity in India improved in August as the S&P Global India Services Purchasing Managers’ Index (PMI) showed growth in comparison to the previous month. The index rose from a four-month low.
In August services PMI index was 57.2 as compared to 55.2 the previous month. In June, it was at 59.2. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
The upturn was attributed to stronger gains in new business, ongoing improvements in demand, job creation and overtime work, S&P Global Market Intelligence said. “Amid reports of favourable demand conditions and successful advertising, there was a further increase in new business placed with services firms during August. The rate of expansion was sharp and quickened from July,” it said.
At the sub-sector level, there were quicker increases in new business and output in transport, information and communication and finance and Insurance. “Indian services activity rose strongly midway through the second fiscal quarter, with the pace of expansion recovering some of the ground lost in July. The pick-up in growth stemmed from a rebound in new business gains as firms continued to benefit from the lifting of COVID-19 restrictions and ongoing marketing efforts,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
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“Finance and insurance was the brightest area of the service economy in August, leading with regards to sales and output growth. As for input cost inflation, Consumer Services topped the sector rankings but it was in Transport, Information & Communication that the fastest rise in selling prices was recorded,” Pollyanna De Lima added.
