"Others displayed concerns surrounding fierce competition
for new work."
However, input costs rose at their slowest pace since
September 2020, enabling firms to raise prices charged at the
weakest rate in a year.
If that trend continues, overall inflation, which rose to
6.52% in January, could ease over the coming months and might
provide some breathing space for the Reserve Bank of India.
The RBI is expected to raise its repo rate to peak at 6.75%
in April from 6.50% currently, according to a Reuters poll last
week.
Strong growth in services activity boosted the composite
index to 59.0 in February from January's 57.5, despite
manufacturing growth slowing to a four-month low.
(Reporting by Indradip Ghosh; Editing by Kim Coghill)
By Indradip Ghosh
BENGALURU, March 3 (Reuters) - Activity in India's
dominant services sector expanded at the fastest pace in 12
years in February on strong demand as price pressures eased
further, a private business survey showed on Friday.
The robust report could fuel hopes for Asia's third-largest
economy, whose growth slowed to an annual 4.4% in
October-December from 6.3% in July-September as pent-up demand
eased and weakness in the manufacturing industry continued.
The S&P Global India Services Purchasing Managers' Index rose from 57.2 in January to 59.4 in February, its
highest since February 2011 and considerably above all forecasts
in a Reuters poll which had predicted a fall to 56.2.
It was above the 50-mark separating growth from contraction
for a 19th straight month, its longest stretch of expansion
since June 2013.
"The service sector more than regained the growth momentum
lost in January...as demand resilience and competitive pricing
policies underpinned the joint-best upturn in sales over the
same period," noted Pollyanna De Lima, economics associate
director at S&P Global.
Although new business surged at its quickest rate in eight
months, firms only increased hiring marginally and business
confidence was the lowest in seven months.
"It seems that hiring growth was also dampened by a lack of
confidence in the business environment. The degree of optimism
recorded in February was...below the historical trend as some
companies doubted demand would remain this resilient," De Lima
added.
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