Services sector surges on demand renewal

Sharp Upturn

- It's highest growth in 14 yrs

- PMI recovers from 4-mth low in July

- S&P Global India Composite PMI Output Index, which measures combined services and manufacturing output, rose from 56.6 to 58.2

New Delhi: India's services sector activity witnessed a sharp upturn in August on the back of stronger gains in new business, ongoing improvements in demand conditions and job creation, a monthly survey said on Monday.

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from July's four-month low of 55.5 to 57.2 in August, amid a quicker upturn in business activity and the sharpest rise in employment for over 14 years. For the thirteenth straight month, the services sector witnessed an expansion in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

"The pick-up in growth stemmed from a rebound in new business gains as firms continued to benefit from the lifting of Covid-19 restrictions and ongoing marketing efforts," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

Forecasts regarding the year-ahead outlook for output were revised higher, with optimism at its greatest degree since May 2018.

"Services companies expect output growth over the coming 12 months, with sentiment rising to its highest level in over four years. Optimism was centred on forecasts of ongoing improvements in demand and planned marketing," the survey said.