India's services sector strengthened further in September, witnessing strongest output in 13 years. India's S&P Global's services PMI stood at 61 in September, up from 60.1 in August. The reading was above the 50-mark separating growth from contraction for a 26th consecutive month.
India's export growth eased to the slowest pace since June but remained in expansionary territory for an eighth consecutive month. Business sentiment for the next 12 months rose to the highest since June 2014, while firms continued to hire for the 16th consecutive month.
"The latest PMI results brought more positive news for India's service economy, with September seeing business activity and new work intakes rising to one of the greatest extents in over 13 years," noted Pollyanna De Lima, economics associate director at S&P Global.
"Besides demand strength domestically, firms noted higher international sales to Asia, Europe and North America."
The S&P Global India Composite PMI Output Index rose slightly to 61.0 in September from 60.9. Data released Wednesday showed that India's manufacturing activity expanded at the slowest pace in five months but services industry growth robust.
Furthermore, India's input prices rose at the slowest pace since March while the prices charged index eased to a six-month low highlighting that companies refrained from raising fees too sharply.
"News on prices was also encouraging. Services charges rose at a softer rate as cost pressures receded to one of the lowest in two-and-a-half years," added De Lima. "Although the latter indicates that near-term output price inflation may cool, worries about potential fluctuations in food prices due to El Nino means the RBI is highly unlikely to cut rates until early next year."
Source Name : Economic Times