Sep services output rate eases, still in expansionary mode

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SME Times News Bureau | 05 Oct, 2021
India's September services output remained in expansion mode on the back of improved demand conditions as well as receding impact of Covid 2.0, the IHS Markit India Services PMI showed on Tuesday.

"Companies indicated that greater footfall boosted sales and output in the latest month, with some taking on additional staff to cope with rising workloads," the PMI report said.

However, the output rate slowed down sequentially during the month under review.

The seasonally adjusted India Services Business Activity Index remained above the threshold 50 (index reading) mark. The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.

The September index reading came in at 55.2 in September from August's 18-month high of 56.7, but the latest reading remained well above its long-run average.

"Despite easing from August, the rate of expansion was marked and the second-fastest since February 2020."

"Buoyed by signs of improvements in underlying demand, Indian service providers took on additional staff during September."

On the combined level -- manufacturing and services, the Composite PMI Output Index eased but managed to stay in the expansionary mode.

The Composite PMI Output Index was at 55.3, little-changed from 55.4 in August and thereby pointing to a marked rate of growth.

"Indian companies continued to benefit from a recovery in demand as the pandemic receded further and restrictions were lifted. The improved market environment meant that firms managed to secure new work and increase business activity during September," said Pollyanna De Lima, Economics Associate Director at IHS Markit.

"Signs from forward-looking indicators were mixed. Employment returned to growth territory, posting the first rise since the onset of the pandemic, suggesting that the rebound in demand is expected to be sustained and that further increases in business activity are in the pipeline."