India's services PMI rises to 53.6 in March

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 53.6 in March 2022 from 51.8 in February 2022.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.

The latest number pointed to the strongest rate of expansion since last December. The upturn stemmed from new business wins, strengthening demand conditions and greater consumer footfall due to the relaxation of COVID-19 restrictions.

Pollyanna De Lima, Economics Associate Director at S&P Global, said: The war in Ukraine exacerbated lingering issues in supply chains, triggering a reacceleration in inflation across the Indian service economy. The March results showed the sharpest upturn in input costs for 11 years, but this did not put a brake on the recovery of the sector.

"Buoyed by the relaxation of COVID-19 restrictions, consumers were eager to go out and spend. Service providers recorded the fastest upturn in new business in 2022 so far, with an equal outcome seen for business activity.

"Sales were somewhat supported by only mild adjustments to output charges,however,with consumers likely to face soaring prices in the coming months as rising cost burdens feed through to services charges.

"Inflation risks continued to curb business optimism regarding growth prospects, with sentiment among services companies remaining subdued by historical standards. This lack of confidence in the outlook also meant that employment continued to fall in March."

Meanwhile, the S&P Global India Composite PMI Output Index stood at 54.3 in March, up from 53.5 in February. The number highlighted the strongest rate of expansion in 2022 so far. Manufacturers signalled a sharper increase than service providers, but growth slowed among the former and accelerated at the latter.

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