The S&P Global India Services PMI Business Activity Index rose to 62 in April from 57.8 in March, signalling the fastest expansion in output since mid-2010.
“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.
Along with robust domestic demand, international demand was strong as the sub-index rose to a four-month peak and business optimism hit its highest since December.
However, employment generation in the services industry only saw a marginal uptick as most firms reported sufficient labour capacities to meet rising demand.
Meanwhile, the input prices index was at a three-month high from a 2-1/2-year low in March and firms raised their charges at the fastest pace this year. The prices charged index rose to 53.5 from 52.4.
“Having retreated in each month since the start of the current calendar year, input price inflation quickened in April…Accommodative demand conditions facilitated the pass-through of additional expenses to clients.”Rising price pressures, alongside an improving economic outlook, mean the Reserve Bank of India will likely lean towards keeping its key interest rate on hold rather than easing it anytime soon.
The overall S&P Global India Composite PMI Output Index rose to 61.6 in April, the highest since July 2010, as activity in both manufacturing and services remained strong.
India’s activities of manufacturing accelerated to a four-month high in April, from new orders and favourable operating conditions.
Factory orders and production rose at the strongest rates in 2023 so far, more jobs were created and companies stepped up input purchasing owing to stock-replenishment efforts, according to S&P India Manufacturing PMI.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index grew to 57.2 in April from 56.4 in March. It indicated the fastest improvement in the health of the sector in the year-to-date (calendar).