India’s services output in Feb sees sharpest rise in 12 years

BLOOMBERG

Activity in India’s dominant services sector climbed to the highest level in 12 years, aided by new business orders and moderation in cost pressures amid resilient demand in the economy. The S&P Global India Purchasing Managers Index for services rose to 59.4 in February from 57.2 in the previous month, according to a statement. A number above 50 shows expansion, while a print below that shows contraction in activity. The gains helped take the composite index to 59 from 57.5 in January.
“The service sector more than regained the growth momentum lost in January,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence. The highest reading since February 2011 provides some relief after gross domestic product growth slowed in the three months to December as manufacturing contracted and services activity moderated.
Slowing exports amid waning global demand and faltering consumption due to rising interest rates may further impede recovery in Asia’s third-largest economy.
Cost pressures eased as input prices increased at the slowest pace in nearly two-and-a-half years, and as a result most firms left payroll numbers unchanged. However, the overall level of positive sentiment for the year-ahead remained below its long-run average, as some companies were concerned about competitive pressures.
“It seems that hiring growth was also dampened by a lack of confidence in the business environment,” said De Lima. “The degree of optimism recorded in February was the lowest for seven months and below the historical trend as some companies doubted demand would remain this resilient.”