India’s services sector growth accelerated in April, as strong demand conditions resulted in the fastest increase in new business and output in close to 13 years, a monthly survey said on Wednesday.
The pick-up in demand occurred in spite of escalating price pressures.
The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.8 in March to 62.0 in April, signalling the fastest expansion in output since mid 2010, amid a pick-up in new business growth and favourable market conditions.
For the 21st straight month, the headline figure was above the neutral 50 threshold. In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
“India’s service sector posted a remarkable performance in April, with demand strength backing the strongest increases in new business and output in just under 13 years. Finance & Insurance was the brightest spot, topping the sectoral growth rankings for both measures,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
Monitored companies signalled an improvement in international demand for Indian services in April. New export business expanded for the third month in succession and at the fastest pace over this period.
On the prices front, input costs rose at the quickest pace in three months during April.
According to survey members, food, fuel, medicine, transportation and wages were the main sources of inflation. Consumer services recorded the fastest upturn in average expenses. The combination of rising input costs and demand resilience urged services companies to lift their selling prices in April. The rate of charge inflation was marked and the strongest in 2023 so far.
