PMI services at decade high

New Delhi: India's services sector activity expanded at the strongest pace in ten-and-a-half years in October, driven by a substantial upturn in business activity amid favorable demand conditions, a monthly survey said on Wednesday.

Companies indicated that a notable pick-up in new business led to the fastest expansion in output in over a decade and as a result more jobs were created, even though business confidence remained subdued due to growing inflationary concerns. The seasonally adjusted India Services Business Activity Index rose from 55.2 in September to 58.4 in October, signaling the strongest rate of growth in ten-and-a-half years. For the third 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 recovery of the sector entered its third straight month, with firms scaling up activity at the fastest pace in ten-and-a-half years and creating more jobs," said Pollyanna De Lima, Economics Associate Director at IHS Markit. On the price front, with input costs again rising sharply, companies lifted their fees at the fastest pace in nearly four-and-a-half years. Monitored companies cited higher fuel, material, retail, staff and transport costs.