New Delhi [India], April 5 : Growth in India's services industry eased in March from February, according to S and P Global India Services PMI Business Activity Index.
Though the index eased to 57.8 in March from 59.4 in February, S and P Global said the index was in growth territory (above 50) for the twentieth successive month due to favourable demand conditions and new business gains were among the reasons cited for the latest rise.
Despite falling from 59.4 in February and thereby indicating a slower rate of expansion, the latest figure was consistent with a substantial uptick in output.
Pollyanna De Lima, Economics associate director at S&P Global Market Intelligence, said: "India's service sector built on to the momentum gained in February with further increases in new business intakes and output at the end of the 2022/23 fiscal quarter. Input price pressures in the service economy continued to subside, alongside the trend seen in manufacturing. Hence, the aggregate rate of input cost inflation moderated to a two-and-a-half-year low."
Similar to output, new business inflows increased at a softer but still sharp rate in March. S&P Global said, "according to survey members, demand resilience, competitive pricing and marketing efforts warranted a further uptick in sales."
The rise in overall new business was supported by an increase in international sales. Compes commonly mentioned an improvement in external demand for their services.
The S&P report said, "There was a further increase in input prices at Indian services firms, amid reports of higher food, fuel, transportation and wage costs. However, with a large proportion of survey participants signalling no change in expenses since February, the overall rate of inflation was mild and the weakest in two-and-a-half years."
The report said, "Backed by demand buoyancy, service providers shared part of their additional cost burdens with clients in March via an upward revision to selling prices. The rate of charge inflation picked up to a three-month high, but was moderate and below that seen for input prices."
The S&P Global India Services PMI is compiled by S and P Global from responses to questionnaires sent to a panel of around 400 service sector compes. The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. Data collection began in December 2005.
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