New Delhi, June 3 (Agency) India’s services sector recorded massive expansion in May on the back of new business growth as demand continued to recover following the reopening of the economy after Covid lockdowns.The services Purchasing Managers’ Index (PMI) climbed to 11-year high of 58.9 in May as compared to 57.9 in April, according to a private survey released on Friday.
While a print above 50 reflects expansion, a reading below it means contraction.S&P Global, the publisher of the survey, said that service sector growth continued to strengthen in May with companies reporting the quickest increase in business activity since April 2011.”The upturn was supported by a substantial pick-up in new business growth as demand continued to recover following the reopening of the economy after Covid-19 lockdowns,” it said.The survey said there had been no signs of inflation abating as price gauges showed an unprecedented increase in input costs and the second-fastest upturn in selling charges in just under five years.
Inflation expectations continued to restrict business confidence with optimism remaining subdued by historical standards.”May data marked a twenty-third successive month of rising input prices at Indian service providers. Moreover, the rate of inflation climbed to the highest in 16-and-a-half years of data collection,” the survey said.Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence said that reopening of the Indian economy continued to help lift growth in the service sector.”Business activity rose at the quickest pace in over 11 years in May, supported by the fastest upturn in new orders since July 2011,” De Lima said.”That said, the inflation outlook appeared to have worsened as input prices rose at the sharpest pace in the survey history. Services firms again reported substantial pressure from food, fuel, input, labour and transportation costs. Output charge inflation softened only marginally from April, being the second-highest in just under five years, as several companies mentioned the need to transfer mounting costs through to clients,” the economist noted.