India's services activity grew faster in August, hiring at over 14-year high

India's services sector expanded for the 13th consecutive month and saw a sharp upturn in August as new orders improved giving rise to the quickest rise in jobs in 14 years, showing S&P Global India Services PMI Business Activity Index.

It rose to 57.2 in August from 55.5 in July.

A print above 50 means expansion, while a score below 50 denotes contraction.

Transport, information and communication reported faster growth in new business volumes as well as output. Finance and insurance outperformed all other sub-sectors.

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"Services activity rose strongly midway through the second fiscal quarter, with the pace of expansion recovering some of the ground lost in July. The pick-up in growth stemmed from a rebound in new business gains as firms continued to benefit from the lifting of Covid-19 restrictions and ongoing marketing efforts," Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence said.

"With demand showing considerable resilience, service providers maintained a degree of pricing power and lifted selling prices...," Lima said.

Composite PMI Index too rose from 56.6 in July to 58.2 in August, indicating a sharp pace of expansion. Aggregate output growth in India recovered from July's slowdown as both manufacturers and service providers noted quicker rates of increase in August.

The encouraging PMI numbers came on the back of a 13.5% growth in India's economy in the first quarter (April-Jun) of the current financial year 2022-23, which also showed a steady improvement in the services sector.