September sees accelerated growth in service sector

India’s service sector, which had already demonstrated robust demand, witnessed a surge in growth during September. Businesses were exhibiting their most optimistic outlook in over nine years.

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During September, India’s service sector, which had already demonstrated strong demand, experienced an uptick in its growth rate. Businesses were the most optimistic in over nine years.

This is a positive development for the third-largest economy in Asia, as it is on track to outpace other major economies in terms of growth this fiscal year, despite the global economic slowdown.

The India Services Purchasing Managers’ Index, reported by S&P Global, rose to 61.0 last month, up from 60.1 in August. This exceeded the expectations of a dip to 59.5 in a Reuters poll. Notably, this marks the 26th consecutive month where the index has remained above the crucial 50-point threshold, indicating sustained growth rather than contraction.

“The latest PMI results brought more positive news for India’s service economy, with September seeing business activity and new work intakes rising to one of the greatest extents in over 13 years,” noted Pollyanna De Lima, economics associate director at S&P Global.

Apart from the strong domestic demand, companies also reported an increase in their international sales to regions such as Asia, Europe, and North America. Although the new business sub-index, which is a critical indicator of demand, saw a slight uptick to 61.2 last month, the pace of export growth slowed to its lowest level since June.