The trial Index of Service Production (ISP) showed that administrative and support services, retail trade, real estate, and accommodation and food services were among the fastest-growing segments of the service economy in July. According to CareEdge Ratings, services output grew by 13.5% year-on-year in July, slightly higher than 13.2% in June. The service sector is expected to maintain its underlying strength in the months ahead, said Rajani Sinha, chief economist at CareEdge Ratings. However, she added that the sector could, to some extent, be affected by challenging external environment, energy price volatility, and supply chain frictions.
According to CareEdge Ratings, services output grew by 13.5% year-on-year in July, slightly higher than 13.2% in June.
The service sector is expected to maintain its underlying strength in the months ahead, said Rajani Sinha, chief economist at CareEdge Ratings. However, she added that the sector could, to some extent, be affected by challenging external environment, energy price volatility, and supply chain frictions.
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“The air transport sector continues to bear the brunt of the ongoing geopolitical tensions and elevated energy costs,” said Sinha.
In June, 18 of the 19 tracked sectors expanded and eight recorded double-digit growth. Administrative and support services led the growth in July, expanding 20.9% year-on-year compared with 14.4% in June. Retail trade followed with 18.5% growth, slightly higher than 18% in June. Next was real estate which grew 14.4%, lower than 24.7% in June.Accommodation and food services grew 12.6% in July, followed by banking (12.3%), wholesale trade (12.1%), telecommunications (11%), IT and computer related services (10.7%), and professional, scientific & technical services including research & development (10.4%). Information and Broadcasting recorded 10% growth, while arts, entertainment and recreation services increased 1.7%.
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The ministry of statistics and programme implementation (MoSPI) launched the ISP in July, with 2024-25 as the base year. The monthly trial index tracks output across 19 sectors that together account for about 60% of the services sector. The transport sector performed well, except for air transport which recorded a decline. Road transport grew 9.9%, while water and railway transport increased 7.7% and 7.5%, respectively. Air transport was among the two sectors to contract in July, falling 8.4% year-on-year compared with a 6% decline in June. “The air transport sector continues to bear the brunt of the ongoing geopolitical tensions and elevated energy costs,” said Sinha. Repair services was the other sector to contract (5%). Warehousing and support activities for transportation recorded 9.8% growth.