The S&P Global India Services PMI business activity index rose from 60.1 in August to 61 in September, indicating a sharp rebound in production, which was one of the strongest in more than thirteen years. The rebound meant that the index averaged 61.1 in the second quarter of the financial year, higher than the previous three-month period (60.6). Production growth in September was attributed to effective marketing, favorable demand conditions and a strong influx of new production.
The survey is composed of responses to questionnaires sent to a panel of approximately 400 companies in the service sector. The figure of 50 points separates growth from shrinkage.
The services sector has grown tremendously since the lifting of pandemic-induced restrictions and has staged a strong recovery thanks to strong domestic and foreign demand.
The latest data shows a substantial increase in new business among Indian service providers, the second fastest since June 2010. Anecdotal evidence suggests that market dynamics remained favorable, supporting demand. Advertising was also cited as a key factor in driving sales. In addition to the increase in total turnover, companies noticed an upturn in demand from abroad, especially from customers in Asia, Europe and North America. Overall growth was significant and among the fastest in the series’ history (since September 2014), despite slowing to a three-month low, the survey results showed.
“A rebound in optimism about the year ahead, fueled by strong demand, bodes well for continued growth in the services sector. Job creation continued,” said Pollyanna De Lima, associate economic director at S&P Global Market Intelligence.
