Services activity eases to 58.1 in February as manufacturing gathers pace

PMI for February

• India's services PMI fell to 58.1 in February from 58.5 in January
• Manufacturing PMI rose to a four-month high of 56.9 in February
• Both services and manufacturing sectors continue strong expansion

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India’s services activity eased slightly in February, slipping to a two-month low of 58.1 from 58.5 in January, even as manufacturing activity strengthened during the month.

Data shows that services Purchasing Managers’ Index (PMI) has largely remained in expansion territory over the past year, consistently staying above the 50 mark that separates growth from contraction. The latest reading, however, signals a marginal cooling from recent momentum.

The February print follows a gradual moderation since mid-2025, when services activity had peaked. The PMI rose to 60.7 in June, remained elevated at 60.5 in July, and reached a cycle high of 62.9 in August before easing in subsequent months. The index moved lower toward the end of the year, touching 58.0 in December, before recovering slightly to 58.5 in January and edging down again in February.

The softer services reading contrasts with developments in the manufacturing sector. Manufacturing PMI climbed to a four-month high of 56.9 in February, pointing to stronger production momentum even as services activity moderated slightly.

Despite the month-to-month fluctuations in survey indicators, official national accounts data show both sectors continuing to expand strongly. Services output grew 9.5 percent in the October–December quarter, up from 9.3 percent in the previous quarter, indicating sustained demand across segments such as trade, transport and financial services.

Manufacturing also posted robust gains. The sector expanded 13.3 percent in the third quarter, compared with 13.2 percent in the July–September period, reinforcing its role as a key driver of overall growth.

At the aggregate level, India’s economy grew 7.8 percent in the third quarter, easing from 8.4 percent in the previous quarter. The government expects the economy to expand around 7.6 percent for the full fiscal year, implying growth in the final quarter will broadly track recent trends.

While services activity cooled slightly in the latest PMI reading, both survey indicators and official data suggest the sector remains a strong pillar of India’s growth momentum.