India’s services sector fell from 59.2 in June to 55.5 in July, marking the slowest rate of growth in four months, according to S&P Global India Services PMI Business Activity Index.
“Falling from 59.2 in June – the highest figure in over 11 years – the latest reading indicated the slowest rate of growth in four months. Companies that signalled higher business activity mentioned ongoing improvements in sales, the offering of new services and workers taking on overtime. The rise was reportedly curbed by price pressures and US dollar strength,” the report added.
Recovery of the Indian service sector lost momentum in the last month over weaker sales growth and inflationary pressures that restricted the upturn in business activity. Weaker recovery was supplemented by retreating price measures, while input costs increased at the slowest rate since February.
"There were many positives in the latest results. Business activity continued to rise strongly, with a similarly robust uplift in new business as the offering of new services and marketing efforts bore fruit,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
Domestic market remained the key source of sales growth, the report added, as international demand for Indian services worsened. The latest drop was the weakest in six months.
Composite PMI
According to S&P, the composite PMI fell from 58.2 in June to 56.6 in July, the slowest increase since March.
“Manufacturing led the upturn with the quickest rise in production since last November, while growth of services activity eased to the weakest in four months. Similarly, new business growth picked up in the manufacturing industry whilst slowing in the service economy. At the composite level, sales increased sharply but at the weakest pace in four months,” it said.
Aggregate employment also rose only marginally in July, with expansion rates mostly alike for goods producers and service providers. “At the composite level, purchase prices and selling charges rose at the slowest rates since February and March respectively,” it said.
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