Services Growth: Sept PMI At 6 Month-Low, Falls Behind Target; Figures & Drivers

  • Economy News
Services Growth: Sept PMI At 6 Month-Low, Falls Behind Target; Figures & Drivers

By Malvika Gurung -- India’s services sector growth made a soft landing in September, easing to a six-month low but continued expanding for the fourteenth straight month despite multiple headwinds and zooming recession fears globally.

According to S&P Global (NYSE: SPGI ), India’s services activity as indicated by the services Purchasing Managers' Index slipped to 54.3 in September from 57.2 in August, lower than’s forecast of 57. 

However, the figure continued to stay above the 50-mark that separates growth from contraction, witnessing the longest expansion streak since Oct 2016.

The survey stated that increased energy, food, labour and material costs led to higher operating expenses for service providers in September.

While an increased number of bookings, events and clients resulted in higher output during the month, the upside was restricted by price pressures, rising competition and unfavourable public policies, the report stated.

The Economics Associate Director at S&P Global, Pollyanna De Lima stated that the month in focus witnessed a broad stabilisation of input cost inflation and the slowest upturn in prices charged for the provision of services since March.

However, a steep depreciation in INR towards the end of the month due to the Fed’s monetary tightening presented additional challenges to the Indian economy.

The report added that weak external demand maintained pressure on sales in the services sector, as international orders declined further in the month.

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