The IHS Markit India Services PMI rose to a five-month high of 53.3 in December 2019 from 52.7 a month earlier, easily beating market expectations of 51.4. Output growth accelerated to the second-strongest rate in over a year and new business rose the most since October 2016, while employment increased for the 28th month in a row and at a rate that, although modest, was the fastest since August. On the price front, input cost inflation was the highest in almost seven years, amid reports of higher charges for food, fuel, medical products and transport. As a result, output charge inflation hit a 22-month high. Lastly, business confidence strengthened, supported by marketing initiatives and favorable economic conditions. Services PMI in India averaged 51.34 points from 2012 until 2019, reaching an all time high of 57.50 points in January of 2013 and a record low of 44.60 points in September of 2013. source: Markit Economics

Services PMI in India is expected to be 49.80 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Services PMI in India to stand at 51.90 in 12 months time. In the long-term, the India Services PMI is projected to trend around 52.60 points in 2020, according to our econometric models.

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India Services PMI

Actual Previous Highest Lowest Dates Unit Frequency
53.30 52.70 57.50 44.60 2012 - 2019 points Monthly

News Stream
Indian Service Sector Returns to Growth
The IHS Markit India Services PMI rose to 52.7 in November 2019 from 49.2 a month earlier, easily beating market expectations of 49.8. New business growth picked up to a four-month high, with export sales advancing for the ninth month in a row, and employment rose the most in three months. On the price front, input cost inflation accelerated to a 13-month high, amid reports of higher food, fuel, and medicine cost. Meanwhile, average prices charged increased the least since July. Lastly, confidence weakened to its highest in three months, supported by marketing initiatives, lower lending rates and favorable state policies.

India Services Contracts at Softer Pace
The IHS Markit India Services PMI rose to 49.2 in October 2019 from 48.7 in a month earlier and compared to market expectations of 49.1. New business stabilised following contraction in September, with export sales rising the least in four months and job creation moderating. Meanwhile, pending client payments caused a renewed increase in outstanding business. The rise in backlogs was marginal, but contrasted with depletion in September. On the price front, input price inflation accelerated to a year high, amid reports of higher freight, fuel, material, vegetable and staff cost. As a result, average prices charged increased modestly. Lastly, confidence weakened to its lowest in near three years, due to concerns over challenging economic conditions.

India Services Sector Contracts in September
The IHS Markit India Services PMI plunged to 48.7 in September 2019 from 52.4 in the prior month and well below market expectations of 52.1. The latest reading pointed to steepest pace of contraction since February 2018, as new orders fell for the first time in one-and-a-half years and employment growth softened to the slowest since June, while backlogs fell for the first time in 40 months. On the price front, input cost inflation was the weakest in over two-and-a-half years, while output price inflation was moderate and little-changed from August. Looking ahead, sentiment deteriorated to a 31-month low.

India Services Output Grows for 2nd Month
The IHS Markit India Services PMI dropped to 52.4 in August 2019 from 53.8 in the previous month, but beating market consensus of 51.9. The latest reading pointed to the second straight month of expansion in the service sector, amid sustained increases in activity, sales and employment. On the price front, input prices continued to increase, boosted by higher food, fuel and staff costs, while the rate of charge inflation quickened to a 17-month high. Finally, business sentiment picked up to a one-year high, amid supportive public policies and predictions of better demand.

India Services Growth Strongest in a Year
The IHS Markit India Services PMI jumped to 53.8 in July 2019, easily beating market consensus of 50.4 and pointing to the quickest increase in output in one year, amid a promising government budget and strengthening demand. New business inflows rose the most since October 2016, with new export work increasing the most since at least September 2014, and employment growth was the strongest in nearly eight-and-a-half years. Meanwhile, unfinished business across the Indian service sector increased the least in 2019 so far. On the price front, input cost inflation rose to a five-month high, due to fuel and raw material prices. Still, the overall rate of inflation remained modest and below the historical average. Meantime, the overall rate of charge inflation was marginal and the joint-slowest in five months. Lastly, confidence strengthened from June's four-month low, as concerns about uncertain public policies have diminished.

Indian Services Sector Shrinks for First Time in 13 Months
The IHS Markit India Services PMI fell unexpectedly to 49.6 in June 2019 from 50.2 in May, missing market forecasts of 50.4. That pointed to the first contraction in services activity since May 2018 when the reading was also at 49.6. New orders were broadly stagnant amid competitive pressures and weak underlying demand. Meanwhile, foreign sales rose for the fourth straight month, albeit at a slower pace, and employment growth slowed to a 22-month low. Unfinished business continued to rise, which panel members linked to delayed client payments. On the price front, despite accelerating from May's 28-month low, overall rate of input cost inflation was negligible and below the average over the survey history. Selling prices rose further, but the rate of charge inflation was marginal, holding close to May's three-month low and remaining below its long-run trend. Finally, confidence weakened to a four-month low, though remained positive.

India Services PMI
The IHS Markit India Services PMI (Purchasing Managers' Index) is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 350 private service sector companies. The index tracks variables such as sales, employment, inventories and prices. A reading above 50 indicates that the services sector is generally expanding; below 50 indicates that it is generally declining.

India Business Last Previous Highest Lowest Unit
Business Confidence 112.80 113.50 127.50 96.40 points [+]
Manufacturing PMI 52.70 51.20 55.00 47.90 points [+]
Services PMI 53.30 52.70 57.50 44.60 points [+]
Industrial Production 1.80 -4.00 19.90 -7.20 percent [+]
Industrial Production Mom 0.70 3.50 14.80 -14.20 percent [+]
Manufacturing Production 2.70 -2.30 24.30 -9.10 percent [+]
Changes in Inventories 391.37 390.39 731.25 184.29 INR Billion [+]
Car Production 163422.00 181889.00 292861.00 7277.00 Units [+]
Car Registrations 191637.00 210687.00 304900.00 6508.00 [+]
Internet Speed 6492.06 5567.50 6492.06 784.09 KBps [+]
IP Addresses 9378846.00 9261013.00 14278593.00 1768679.00 IP [+]
Total Vehicle Sales 1405776.00 1792415.00 2584096.00 12914.00 units [+]
Mining Production 1.70 -8.00 13.00 -17.50 percent [+]
Steel Production 8934.00 9089.00 9412.00 713.00 Thousand Tonnes [+]
Cement Production 27156.00 26195.00 33124.00 9355.00 Thousands of Tonnes [+]
Capacity Utilization 73.60 76.10 83.20 71.00 percent [+]
Competitiveness Index 61.36 62.02 62.02 4.20 Points [+]
Competitiveness Rank 68.00 58.00 71.00 42.00 [+]
Composite Pmi 53.70 52.70 55.40 46.00 points [+]
Corruption Index 41.00 40.00 41.00 26.30 Points [+]
Corruption Rank 78.00 81.00 95.00 35.00 [+]
Deposit Growth 9.80 10.10 29.30 2.70 percent [+]
Ease of Doing Business 63.00 77.00 139.00 63.00 [+]
Electricity Production 266308.00 241842.00 266308.00 27666.00 Gigawatt-hour [+]