India services PMI growth dipped slightly in January
1 min read . Updated: 03 Feb 2023, 10:53 AM IST
Premium- January saw sharp expansions in services activity and new business, as per the survey
Posting 57.2 in January, the seasonally adjusted S&P Global India Services PMI, fell from 58.5 in December, as per a private business survey release on Friday. Though, the latest figure remained above its long-run average (53.5) and indicated a sharp rate of growth and the upturn was associated with favourable demand conditions and ongoing increases in new work.
The S&P Global India services Purchasing Managers' Index (PMI) fell to 57.2 in January from 58.5 in December, missing expectations in a Reuters poll for 58.1 but above the 50-mark separating growth from contraction for an 18th straight month.
Underlying data suggested that the rise in total new business was centred on the domestic market, as international orders decreased. The fall was only marginal, but compared with the strongest upturn for almost three-and-a-half years in December, said the survey.
Services companies noted a further increase in their expenses during January, which they attributed to higher costs for a wide range of materials, food and staff. Whilst remaining above its long-run average, the rate of inflation softened to a two-year low.
Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: “As seen earlier in the week from the manufacturing PMI results, growth across the service sector lost some momentum at the start of the year. Yet, the survey showed us that service providers received high amounts of new business which helped keep the overall rate of growth historically prominent."
After re-accelerating in December, input cost inflation in the service economy retreated to a two-year low in January, aiding a slower and only moderate upturn in selling prices, he added.
“The latest results highlighted some caution among service providers, partly evidenced from the vast majority of firms predicting no change in output from present levels. This somewhat subdued level of confidence towards the outlook appeared to have stymied job creation in January," said De Lima.
Meanwhile, the S&P Global India Composite PMI Output Index fell from December's near 11-year high of 59.4 to 57.5, but remained above its long-run average (54.1). Manufacturing production increased at a stronger rate than services activity, but growth moderated in both cases, as per the data by the survey.
