Image has been used for representational purpose only. file | Photo credit: The Hindu
India’s services sector registered a sharp growth in new business in December 2022, led by finance and insurance services, which reached 58.5 last month, according to the S&P Global India Services Purchasing Managers’ Index (PMI). from 56.4 in November 2022, A reading of 50 on the index indicates no change in business activity levels.
New orders for services firms rose for the 17th consecutive month and the fastest since August 2022, according to the survey-based PMI Business Activity Index, which reflects the strongest pace of overall growth in services since mid-2022 Is.
with him India Manufacturing PMI also registered strong growth in DecemberThe S&P Global India Composite PMI Output Index rose from 56.7 in November to 59.4 in December, the fastest rate of growth since January 2012 or nearly eleven years.
Real estate and business services saw the slowest expansion in new orders during December, even as input cost inflation accelerated from November 2022 levels, with firms citing wage pressures and higher prices for energy, food and transport.
Consumer services were the most affected by this increase in input cost inflation, while financial and insurance services firms increased their charges the most for the second month in a row.
The services sector continued to increase hiring to keep pace with a pick-up in production and business, but job creation fell to a five-month low. Although overall positive sentiment was above average, companies were ‘least upbeat’ in three months with competitive pressures and inflation concerns rising, the firm said.
“As we move into 2023, companies have indicated strong optimism towards the output outlook. About 31% of panellists forecast growth, while only 2% forecast a contraction,” said Pollyanna De Lima, associate director of economics at S&P Global Market Intelligence.
“Inflation trends were mixed, as input prices rose at a faster pace and tariffs accelerated. On the expenditure front, service firms reported pressure from energy, food, staff and transport costs and many companies felt the need to pass on rising costs through to customers,” he said.
Composite PMI
The combined performance of the manufacturing and services sectors in December was reported by S&P Global as gross sales rose the fastest since August and were fueled by a rapid expansion in goods producers and service companies.
“As capacity pressure eased, job creation in the private sector fell to a five-month low. At the aggregate level, inflation stood at a two-month high and was above its long-term average. Output charge inflation in the private sector also ticked higher, as robust growth in the manufacturing industry more than offset the slowdown among service providers,” it underlined.