India’s services PMI falls to 60.1 in August from 62.3 MoM

India’s services activity continued to expand in August, but at a slower pace than in July. The services purchasing managers' index (PMI) fell to 60.1 in August from 62.3 recorded in July, according to data released by S&P Global on Tuesday.

Despite falling from 62.3 in July to 60.1 in August, the seasonally adjusted S&P Global India Services PMI Business Activity Index indicated one of the strongest increases in output seen since mid-2010.

It remains above the key level of 50 that separates expansion in activity from a contraction. The services PMI has been above 50 for 25 consecutive months.

Advertising and robust demand for services were among the reasons listed for growth. Although softer than in July, the overall expansion in sales was one of the strongest seen in 13 years, S&P Global said.

Granular data showed that Finance & Insurance again led growth of both total new business and output in August. 

The S&P Global India Services PMI is a survey-based indicator based on the responses of around 400 service sector companies. 

The sectors covered include consumer (excluding retail), transport, information, communication, finance, insurance, real estate and business services. 

Earlier, S&P Global data showed the manufacturing PMI rose to a three-month high of 58.6 in August from 57.7 in July.

Therefore, the composite PMI, a combination of the manufacturing and services indices, fell to 60.9 from 61.9 in July.

“Following the footsteps of encouraging manufacturing PMI released last week, the services PMI data today confirmed the buoyancy in the Indian economy. The continued expansion was driven by record new export business from several regions including Asia-Pacific, Europe, North America and West Asia.  We believe that good PMI numbers has shown evidence of a strong undercurrent in the economy despite persistent inflationary pressures,” said Manish Chowdhury, Head of Research, StoxBox.

With the current monsoon deficiency clouding the prospects of a sustained easing of inflation in coming months, it would be interesting to see the momentum in manufacturing and services sector going ahead, he added.