From 58.9 in May to 59.2 in June, S&P Global India Services PMI The Business Activity Index was at its highest level since April 2011 and indicated a rapid rate of growth. The acceleration in growth was broad-based in the four monitoring sub-sectors. According to panelists, the pandemic stems from an ongoing recovery in demand following the withdrawal of restrictions, capacity expansion and a favorable economic environment. The survey is compiled from questionnaire responses sent to a panel of around 400 service sector companies.
While firms expect the recovery to last for 12 months, concerns over price pressure have dampened business confidence. According to the survey, input costs continued to rise at a historically high pace, albeit at the slowest pace in three months, while charge inflation hit a nearly five-year high. The critical service sector was hit hard by the waves of the Covid-19 pandemic as restrictions imposed to contain the spread of the deadly virus closed shopping malls, hotelRestaurants and Hurt Tours and Travels.
“Consumer services posted the strongest growth in both output and new orders in June, but growth accelerated across the board. Cost pressures in the services economy remained strong despite easing to a three-month low in June. Companies With significant pricing power, due to strong demand conditions, excise duty inflation reached a near five-year peak.” Pollyanna LimaAssociate Director of Economics at S&P Global Market Intelligence.
Services firms saw a substantial increase in new work intake at the end of the first fiscal quarter, improving to the best growth rate in 11 years.
Firms were able to receive new orders despite charging more for their services. The June data showed the sharpest increase in selling prices since July 2017 as several companies sought to pass on some of their additional cost burden to customers.
Persistent inflation continued to worry businesses.
“The boom in services PMI reaffirms our view that the services sector will lead the way in improving growth in FY2023. Medium to high income households are likely to prioritize spending over contact-intensive services, which is the highest during the pandemic. , were saved on cost. of consumer durables. This is likely to result in a slower recovery in capacity utilization levels, marginally delaying private sector capital expenditure plans amid global adverse conditions and rising commodity prices. Aditi NayariChief Economist at Rating Agency execution,