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India’s Nov services activity growth hit three months high

06 Dec 2022 00:00:00 | Update: 05 Dec 2022 22:50:59
India’s Nov services activity growth hit three months high
A file photo shows Boman Kohinoor speaking to customers before taking down their food order at his restaurant in Mumbai– Courtesy Photo

India’s services activity grew at its quickest pace in three months in November on strong demand, lifting optimism to its highest in eight years, according to a business survey, which also showed prices rose at the fastest rate since July 2017.

The S&P Global India services purchasing managers’ index (INPMIS=ECI) rose to 56.4 in November from 55.1 in October, beating the 55.4 estimate in a Reuters poll.

It remained above the 50-mark separating growth from contraction for a 16th straight month, its longest stretch of expansion since October 2016, reports Reuters.

“Indian service providers continued to reap the benefits of strong domestic demand, with PMI data for the penultimate month of 2022 showing faster increases in new business and output,” noted Pollyanna De Lima, economics associate director at S&P Global.

“Moreover, expectations of demand buoyancy in the medium-term promoted further job creation.”

Official data released last week showed pent-up demand for services helped private consumption grow 9.7per cent annually last quarter, which helped Asia’s third-largest economy grow 6.3per cent during the period.

However, growth is widely expected to slow in the coming quarters as high-interest rates hamper economic activity.

The PMI showed overseas demand expanded for the first time since the pandemic started, an encouraging sign given slowing global growth has already started to hurt exports, which fell 17per cent over a year ago in October. Strong demand boosted business confidence to its highest since January 2015.

However, elevated input prices forced firms to raise prices charged at the sharpest rate in about five-and-a-half years.