India's business activity

Medilytix Bureau:

India’s business activity saw a sharp spike in April at 57.9 as against 53.6 in March, according to data by S&P Global India Services PMI. “At 57.9 in April, up from 53.6 in March, the seasonally adjusted S&P Global India Services PMI Business Activity Index highlighted a sharp rate of expansion that was the fastest since last November. Anecdotal evidence indicated that output was boosted by higher bookings, the easing of pandemic-related restrictions and favourable demand conditions,” it added.

New business inflows expanded in April, ensuring the ninth month of consecutive growth. The latest rise was the sharpest since November 2021. Lifting of COVID-19 restrictions led to general improvement in demand, it added.

“Owing to a combination of recovering demand and sharp cost pressures, Indian service providers lifted their selling prices again at the start of fiscal year 2022/23. The rate of charge inflation was marked and the highest in close to five years,” it added.

Operating expenses for Indian services firms have soared with higher chemical, food, fuel, labour, material and retail costs. The overall rate of inflation was sharp and the second-strongest since December 2005, when data collection began.

Additionally, inflation concerns restricted business confidence in April. While still in green, overall sentiment slipped from March.

Outstanding business volumes increased, as did demand conditions. Backlog accumulation was slight and little-changed from March.

Companies resumed their hiring efforts in April – the first increase since November. The extra staff is linked to ongoing business growth.

However, international demand for Indian services worsened in April, keeping in line with the monthly trend since the onset of COVID-19 in March. New orders from abroad fell at the quickest pace since September 2021.

Consumer Services and Finance & Insurance were the best-performing sub-sectors in April, while Real Estate & Business Services was the only segment to record contractions in sales and output.

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