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Services sector activities hit five-month high in April

New Delhi, May 5 (PTI) Services sector activity has recovered to a five-month high in April on pick-up in business activity and a revival in employment.

The seasonally adjusted S&P Global India Services PMI business activity index rose to 57.9 in April. It stood at 53.6 in March, showing the fastest rate of expansion since November despite rising price pressure.

This is the ninth consecutive month that the service sector has witnessed an expansion in production. The Purchasing Managers’ Index (PMI) above 50 indicates an increase in activity, while a drop below 50 indicates a decline.

“While the PMI numbers for the services sector are mostly encouraging, new business flows and production were boosted by increased demand,” said Paulina Di Lima, S&P Global’s associate director of economics.

The survey said that despite the construction cost reaching record high levels, the growth momentum in the Indian services sector has remained steady. Selling prices have risen at the fastest rate since July 2017 and concerns over rising inflation are weighing on business confidence.

“Service providers say they have to pay more for food, fuel and raw materials, with some saying the increase in wage costs has increased overall expenses,” Lima said. The overall rate of inflation is at the second highest level since the start of the survey, forcing companies to increase selling prices.

The survey said that due to the lifting of the restrictions of Kovid-19, the number of consumers has increased and thus the demand has also increased significantly.

On the employment front, companies continued to recruit in April and employment increased for the first time since November. Companies that hired additional personnel said this was because of the continued growth in new business.

Meanwhile, the overall PMI production index rose to 57.6 in April from 54.3 in March, marking the fastest growth in the past five months.

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