After a robust and steady expansion in the post Covid scenario, India’s service economy in October witnessed a deceleration in growth and pick-up in price pressure as the seasonally adjusted S&P Global India Services PMI Business Activity Index fell from 61.0 in September to 58.4 in October, signalling the slowest rate of expansion since March. Although India continued to post substantial growth of aggregate business activity, the upturn lost strength in October amid slower increases in manufacturing production and services activity. New business recorded a similar loss of growth momentum, with manufacturing companies and their services counterparts indicating softer increases. At the composite level, sales rose at the slowest pace since January 2023.
Inflationary forces strengthened, demonstrated in the faster increases in input costs and output charges during October, with rates of inflation outpacing their respective long-run averages primarily as a result of surging food, fuel and staff costs. Although survey participants passed these additional cost burdens on to clients, permitted by demand strength, the rise in charges could have been the trigger of the deceleration in sales growth. Moreover, a pick-up in inflation expectations in October dampened business confidence. Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence
Survey members noted