Financial News: India Service Sector Growth Softens To 7-Month Low

India Service Sector Growth Softens To 7-Month Low

11/03/2023 - 08:17:00 (RTTNews)

(RTTNews) - India's service sector growth decelerated at the start of the third fiscal quarter but the pace of growth remained robust, survey data from S&P Global showed on Friday.

The services Purchasing Managers' Index fell to 58.4 in October from 61.0 in September. The score signaled the slowest rate of expansion since March.

Despite softening business activity and new work intakes, the Indian service economy continued to register 'impressive' growth, said S&P Global Market Intelligence Economics Associate Director Pollyanna De Lima said.

The growth was driven by favorable demand trends and positive market conditions, the survey revealed.

New business received by service companies increased for the twenty-seventh month in a row. The pace of growth was the weakest since May due to fierce competition and subdued demand for certain types of services.

International orders grew at the second-fastest pace since records began in September 2014.

Due to higher costs of food and fuel, inflation quickened from September. As firms raised their selling prices, output price inflation was the joint-strongest in close to six-and-a-half years.

Robust demand for services continued to stimulate hiring activity. Nonetheless, the rate of job creation was the slowest in three months.

Capacity pressures remained mild as highlighted by a slight uptick in outstanding business volumes. The future activity index dropped by more than five points amid rising inflation expectations. Further, the survey suggested that India continued to register substantial growth of aggregate business activity but the upturn lost strength due to slower increases in manufacturing production and services activity.

The S&P Global India Composite Output Index fell to 58.4 from 61.0 in September. The score indicated the weakest rate of expansion since March.

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