India Services Economy Expands at Four-Month Peak in Oct

India’s service sector experienced a robust surge in October, pushing the purchasing managers’ index to 55.8. Up from 55.2 the prior month, this reading marks a four-month high and signals enduring commercial vitality.

Sustained above the 50 expansion line, the latest data beats historical averages and reflects a resilient market. On the cost side, energy and input expenses fell to their lowest level since August 2020. Additionally, service firms tempered the speed at which they increased client charges, marking the slowest fee escalation since June.

The wider economic picture brightened as well. The composite PMI, capturing both services and manufacturing, climbed to 56.2 from 55.9. This underscores the fastest growth in national output over the last quarter and highlights a stable business environment.

Operating conditions showed measured improvement. While homegrown demand stayed strong, outbound order growth slowed to its gentlest rate since February 2023. Firm pricing continued, yet inflationary heat cooled compared to September, easing pressure on margins.

Sector-wide growth was evident across key verticals. Banking and insurance led the charge, while real estate and professional services showed relative caution. Domestic consumers and corporate buyers were the primary engines of revenue, reinforcing the sector’s reliance on local markets.

Industry participants remain bullish about the outlook. Firms project continued scaling of output and business operations in the year ahead. Backlog clearance also accelerated, marking the third consecutive reduction in pending jobs over four months. This operational tightening, however, slightly dampened the rate of new employment creation.

Importantly, price pressures stayed subdued in services relative to manufacturing. This healthier cost control framework indicates a well-positioned industry that can likely deliver more stable pricing, potentially benefiting everyday consumers in upcoming months.