PMI for services increases to 59.2 in June

5 Jul 2022 , 12:12 PM

The S&P Global India Services Purchasing Managers’ Index (PMI), which was published with data on July 5th, indicated that services activity in India increased once more in June.

The June services PMI is the highest since April 2011, coming in at 59.2. The services PMI for May was 58.9. A reading above 50 denotes increased activity, while a print below 50 suggests decreased activity.

“At the conclusion of the first fiscal quarter, services businesses noticed a significant increase in new work intakes, with the rate of increase rising to the best in more than 11 years. Members of the poll commented on improving demand circumstances, expanding customer bases, and successful marketing where growth was indicated “said S&P Global in a release.

According to Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence, the demand for services has increased to the greatest extent since February 2011, supporting a strong economic expansion for the sector over the first quarter of FY23 and laying the groundwork for another significant increase in output next month.

The main feature of the PMI report was rising prices in conjunction with growing demand. “Unrelenting inflation” remained a worry, according to S&P Global. Input cost inflation declined to a three-month low in June, although it still remained high by historical standards.

Consumers paid more as a result of these increased input costs, with June seeing the fastest increase in selling prices since July 2017. The Reserve Bank of India has raised interest rates by 90 basis points so far in FY23 as a result of high inflation.

The most recent headline retail inflation rate for May was 7.04 percent, above the medium-term objective of 4 percent for the 32nd consecutive month and the 6 percent upper bound of the 2 to 6 percent tolerance range for the fifth consecutive month.

Although increased demand made it possible for service providers to raise rates, it also put a strain on their resources. While 94 percent of the businesses questioned did not boost hiring, some did, leading to a slight gain in employment in the services sector in June as the industry bounces back from the blow dealt by repeated coronavirus outbreaks.