India (Commonweath Union)_ Despite significant inflationary pressures, the Indian services sector saw increased activity in October, supported by strong domestic demand, which, according to a private study, resulted in the second-fastest hiring rate in more than three years.
The S&P Global India Services PMI increased from September’s six-month low of 54.3 to 55.1 in October. For the sixteenth consecutive month, the headline figure above the neutral 50.0 cutoff and was higher than its long-term average. Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, remarked that despite raising their prices once again in October, service providers had little issue finding new business.
Demand indicator, the new business sub-index, increased from a six-month low in September as sales were lifted by better market conditions. That was true even though last month’s operational costs were high. Inflation exceeded its long-term average, indicating that the third-largest economy in Asia is still facing increased cost pressures. Numerous businesses reported that rising food, gasoline, and retail costs contributed to their overall spending in October. Prices charged for the provision of services also increased, with a portion of these higher costs being passed along to consumers.
Since the beginning of the year, India’s inflation rate has been slightly over the Reserve Bank of India’s (RBI) target range of 2%–6%. In order to ease pricing pressures and stabilize a falling currency, the RBI has increased its benchmark interest rate by 190 basis points since May. The number of jobs being created in the services sector increased, and corporate expectations reached a nearly eight-year high. Hiring was the second-fastest in more than three years, excluding August. As both manufacturing and services activity remained robust, the S&P Global India Composite PMI Output Index increased to 55.5 from 55.1 in September.
