India's service sector continued its robust expansion in February, despite a minor deceleration in the growth pace of new orders and output, according to data from S&P Global. The services purchasing managers' index experienced a slight dip, falling to 60.6 in February from 61.8 the previous month. Despite the drop, it still well surpassed the neutral threshold of 50.0, indicating a sharp and sustained growth well above the sector's historical average.
February marked the twenty-first consecutive month of expansion for new order inflows. However, the pace of growth was somewhat slower than the recent high achieved in January. Export demand experienced a robust increase with a surge in foreign orders from countries and regions including Australia, Asia, Europe, the Americas, and the UAE.
On the pricing end, input costs continued to escalate due to rising food, freight, and labor expenses. Yet, the inflation rate was the second-lowest that has been recorded in a span of 42 months. Consequently, inflation of charges eased to its lowest level in two years.
Throughout February, companies in India scaled back their recruitment efforts, resulting in only modest job creation as the existing labor supply adequately met demand. The composite output index fell to 60.6 in February, down from its six-month peak of 61.2 in January, pointing to a slower yet more marked rate of growth in India's private sector.
