India's service sector experienced another month of solid expansion driven by strong domestic and international demand, with the seasonally adjusted India Services purchasing managers index (PMI) registering at 58.5 in October, a rise from 57.7 in September. This figure continues to be well above the 50-mark threshold that distinguishes growth from contraction.
The service sector's international sales saw a notable upsurge, as highlighted by a recovery in new export sales across India's service economy. Survey respondents attributed this resurgence to heightened demand from clients located in Africa, Asia, the Americas, the Middle East, and the UK. To cater to this increasing demand, Indian service managers stepped up hiring at the fastest rate in 26 months.
Despite the expansion of payrolls, outstanding business volumes continued to rise, marking the 34th consecutive month of growth. Additionally, service managers reported a modest rate of input inflation in October, primarily stemming from increased food and labor costs. In response to these pressures, many managers opted to raise prices for their customers. Business confidence remained notably high, with approximately one-quarter of survey respondents anticipating an increase in business volumes over the upcoming 12 months, while three-quarters expected the current level of activity to remain stable. The India service PMI calculations were compiled from responses obtained from 400 service-sector companies between October 9 and October 29.
Furthermore, the India composite PMI, which encompasses both the manufacturing and services industries, rose to 59.1 in October, up from 58.3 in September..