Services sector activity in India continued to remain strong in September despite a small fall from August. Strong domestic demand, along with international orders helped the sector as Covid-19 restrictions eased.
According to the monthly IHS Markit India Services Purchasing Managers’ Index (PMI) survey released on October 5, services PMI stood at 55.2 in September, down from 56.7 in August. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
"Indian companies continued to benefit from a recovery in demand as the pandemic receded further and restrictions were lifted," said Pollyanna De Lima, economics associate director at IHS Markit. "The improved market environment meant that companies managed to secure new work and increase business activity during September, she added.
As the growth of new work intakes continued, PMI survey respondents noted accommodative market conditions such as rising consumer footfall. This also led to the number of jobs in the sector going up after a nine-month period.
International demand for Indian services also improved, with new export businesses rising at a quick pace. The increase was attributed to international travel restrictions slowly giving away and business closures reversing.
However, higher fuel, material, transportation and retail charges meant that average cost burdens rose for service providers.
Business expectations remained positive on hopes the pandemic would continue to retreat and restrictions ease, but the outlook was muted by concerns over high inflationary pressures.
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