India’s service sector growth weakens to a three-month low in June, ETCFO

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<p>India's service sector growth weakens to a three-month low in June</p>
India’s service sector growth weakens to a three-month low in June

The business activity growth in India’s services sector eased to a three-month low in the month of June while output charges saw the sharpest rise in close to six years, a private survey showed on Wednesday.

The S&P Global India services Purchasing Managers’ Index (PMI) fell to 58.5 last month from 61.2 in May. India’s services PMI reading has been above breakeven for nearly two years, the longest stretch since August 2011.

“Demand for Indian services continued to surge higher in June, with all four monitored sub-sectors registering quicker increases in new business inflows,” noted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

A new business sub-index, a proxy for overall demand, rose to 58.8 last month from 58.4 and services firms added jobs for a 13th consecutive month. Business optimism was at its highest so far this year.

However, the slowing global economy dragged export growth to a three-month low. Meanwhile, services firms raised prices charged at their sharpest rate since July 2017 despite slowing input cost inflation.

“Service providers experienced a retreat in cost pressures, although business expenses rose again amid higher food and wage costs. Charge inflation showed some signs of stickiness, picking up only slightly from May but nevertheless reaching a near six-year high. Combined with manufacturing, output prices across the private sector increased at the sharpest pace in over a decade,” said Pollyanna De Lima.

According to the report, sub-sector splits indicated that Consumer Services topped the rankings for most measures, registering the strongest increases in intakes of new work, business activity, employment and input costs.

  • Published On Jul 5, 2023 at 11:46 AM IST

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