New Delhi, Nov 3 (FN Bureau) India’s service activities expanded at a slower pace in October 2023 due to competitive conditions and price pressures. The S&P Global India Services Purchasing Managers’ Index (PMI) fell to 58.4 in October from 61.0 in September this year. “At 58.4 in October, the seasonally adjusted S&P Global India Services PMI Business Activity Index indicated a substantial upturn in output. This was despite the headline figure falling from 61.0 in September and signaling the slowest rate of expansion since March,” S&P Global said. While a reading above 50 means expansion, a print below 50 shows contraction. The survey noted that there were faster increases in input costs and output charges during October, with rates of inflation outpacing their respective long-run averages.
“At the same time, a pick-up in inflation expectations dampened overall business sentiment, it said. The services sector, which contributes over 50 per cent to India’s gross domestic product (GDP), has been one of the key growth drivers of the economy. Commenting on survey findings, Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said the Indian service economy continued to register impressive growth, despite the increases in business activity and new work intakes softening from September’s over 13-year highs.
“Several companies managed to secure new contracts, but some mentioned subdued demand for their services and competitive conditions,” the economist further said. The survey noted that positive demand for Indian services continued to support growth in business activity at the start of the third fiscal quarter. It further said job generation was maintained and the outlook remained bright during the month. “Exports was an area of particular strength in October, with new business gains from Asia, Europe, and the US boosting growth to its second-highest in the series over nine-year history,” Pollyanna De Lima said. “Inflationary forces in the Indian service sector intensified, primarily as a result of surging food, fuel, and staff costs,” De Lima further noted.