India's service sector activity logged a further sharp expansion in June amid positive demand trends, the results of the purchasing managers' survey by S&P Global showed on Wednesday.
The services Purchasing Managers' Index, or PMI, dropped to 58.5 in June from 61.2 in May. Nonetheless, a score above 50 indicates expansion in the sector.
The overall strong growth was attributed to on-going increases in new business, a healthy demand environment and marketing initiatives.
New orders logged a quicker expansion in June on the back of fruitful advertising and favourable market conditions. Meanwhile, new export orders rose at a slower pace.
On the price front, charge inflation was marked and the strongest seen in just under six years. Increasing input and staff costs were cited by firms as the primary cause of the latest rise in output charges.
In June, service companies reported an increase in outstanding business volumes.
In line with rising demand requirements, firms raised their employment levels, though the rate of job creation was slight.
Indian service companies remained optimistic about growth prospects amid hopes of favourable market conditions and customer relations, and predictions of further demand strength.
The composite output index came in at 59.4 in June versus 61.6 in May, indicating a slower expansion in the private sector amid softer increases in both manufacturing production and services activity.
"The latest PMI results for output charges coupled with upside risks to food prices suggest that interest rates are highly unlikely to be reduced as 2023 progresses," Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said.
