Services PMI at over 13-year high in July

Services PMI at over 13-year high in July: In July, India’s services sector experienced a significant rebound, achieving its highest growth in 13 years. The recovery was driven by robust demand and new business gains, leading to an increase in the S&P Global India Services Purchasing Managers’ Index (PMI) to a record high of 62.3. The PMI is a survey-based index that gauges service sector activity levels. A reading of the index above 50 indicates expansion, whereas a reading below 50 suggests contraction. This positive trend has been ongoing for 23 consecutive months since August 2021.

Daily Current Affairs Quiz: August 2023

Services PMI at over 13-year high in July: key points:

1. Record High Output and Strong Demand

• Services sector output rebounded in July, reaching the fastest pace since June 2010.
• The survey-based indicator hit a 13-year high of 62.3, indicating a strong increase in activity.
• The upturn was attributed to strong demand and new business gains.

2. Job Creation and Workload

• Despite the increased workload, the pace of job creation remained slow and consistent with the previous two months.
• Companies resorted to hiring a combination of part-time, full-time, permanent, and temporary staff.

3. Input Costs and Output Prices

• Input costs increased at the fastest rate in 13 months, owing primarily to rising food, labour, and transportation costs.
• However, firms seemed cautious about losing fresh contracts, leading to a slower increase in output prices.

4. Boost from Export Orders

• Overseas markets provided a boost, with firms reporting the second-fastest increase in export orders since the index was introduced in September 2014.
• Key sources of growth in export orders came from countries like Bangladesh, Nepal, Sri Lanka, and the UAE.

5. Positive Outlook

• The broad improvements in sales, both domestically and abroad, were viewed as especially welcome in the current hard global economic scenario.
• Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, expressed optimism about the positive trend.

6. Long-standing Expansion

• The headline figure of the Purchasing Managers’ Index (PMI) has been in the expansion zone for 23 consecutive months since August 2021.

7. Survey Details

• The PMI survey queried 400 companies from a variety of industries, including non-retail consumer services, transportation, information and communication, finance, insurance, real estate, and business services.