November's services sector growth fastest in a decade

India's services sector activity in November registers second-fastest pace of growth since July 2011

Amid reports of higher fuel, labour, material, retail and transportation costs, average input prices among services companies rose further in November

Representative image. Credit: iStock Photo

Activities in the services sector - the biggest in India’s economy - expanded at the second-fastest pace in over a decade in November, showed the Purchasing Managers’ Index compiled by IHS Markit, which rose 58.1 in November.

It was, however, a tad lower than October’s 58.4. A print above 50 in Purchasing Managers’ Index (PMI) parlance is expansion while any number below that is contraction.

This is the fourth consecutive expansion in the sector, which accounts for nearly 60% of the country’s economy. Rising price pressures, however, is still a concern. 

“The recovery of the services sector entered its third straight month, with firms scaling up activity at the fastest pace in ten-and-a-half years and creating more jobs,” said Pollyanna De Lima, economics associate director at IHS Markit.

Amid reports of higher fuel, labour, material, retail and transportation costs, average input prices among services companies rose further in November.

However, the pandemic and travel restrictions reportedly caused a further drop in international demand for Indian services.

The latest fall in external sales was the twenty-first in successive months, although among the slowest over this period.

Lima said companies were somewhat convinced that output levels would continue to increase in the year ahead, but worries regarding inflationary pressures weighed on confidence again.

“New export business decreased in October, a trend that has been recorded since the Covid-19 outbreak. Despite being solid, the rate of contraction was the weakest since March,” the survey said.

Earlier, the PMI for manufacturing in November showed it grew at its fastest pace in 10 months. The Composite PMI too rose to 59.2 in November from 58.7 in October.

The GDP growth stood at 8.4 per cent in the second quarter of 2021-22 and surpassed the pre-Covid level, official data showed on Tuesday.

Check out latest DH videos here