S&P India Services PMI rises to 57.9 in April from 53.6 in March; Export orders fall the most since September 2021
S&P India Services PMI rises to 57.9 in April from 53.6 in March; Export orders fall the most since September 2021
India’s services sector new business and manufacturing grew in April at the fastest pace in five months, despite selling prices rising at the fastest rate since July 2017 amid near-record rises in input costs, according to the S&P Global India Services PMI. which rose to 57.9 in April from 53.6 in March.
Inflation concerns continued to weigh on business confidence even as employment rose for the first time in five months, according to the survey-based index. A reading of 50 on the PMI signals no change in business activity.
“International demand for Indian services deteriorated in April, a trend recorded in every month since the outbreak of COVID-19 in March 2020. New overseas orders fell at a significant pace, the fastest since September 2021,” S&P Global called.
The real estate and business services sectors were the only ones to report falls in orders and manufacturing in April, while consumer services, financials and insurance were the best performers.
Firms reported higher chemical, food, fuel, labour, material and retail costs in April, with headline input inflation rising at the second fastest pace since PMI data began to be collected in 2005. Some firms also reported higher labor costs, which pushed up overall costs.
“Nevertheless, companies resumed hiring efforts in April, as evidenced by the first rise in employment since November last year. The firms that hired additional staff linked the increase to continued growth in new business,” the firm said.
Pollyanna De Lima, associate director of S&P Global Economics, said that as fiscal 2022-23 began, the services economy had followed manufacturing and gained growth momentum. “In isolation, services PMI data was mostly encouraging as rising demand underpinned a faster rise in new business flows and output,” she said.
Price pressures picked up again in April, Ms De Lima said, leading to companies increasing selling prices the most in nearly five years.
The consumer services sector recorded the largest increase in input costs, while the transport, information and communication sectors reported the highest pass-through to retail customers.
