Khushboo Singh
The Services Purchasing Managers’ Index for July hit 62.3, the highest level in over 13 years. June of 2010 was the last time it was higher. For the past 24 months, it has likewise maintained a reading above the critical threshold of 50, which distinguishes growth from contraction.The PMI is an indicator gleaned from survey data provided by about 400 service providers. Non-retail services for consumers, transportation, information and communication systems, banking, insurance, real estate, and business services are all included. Each industry has its own index, and those indices are added together to form the PMI.
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The PMI is often regarded as a reliable gauge of economic momentum because it compares current activity to that of the same time last month and accounts for seasonal effects. In addition, the PMI is the most recent data available; each month’s PMI for the services and manufacturing sectors is published in the first week of the following month.The official data on economic activity, such as the Index of Industrial Production or the index of eight core industries, are provided with a lag of a month or more. Therefore, policymakers frequently use PMI data as a leading indicator of the economy’s health.S&P Global reported on July 1 that the manufacturing PMI had decreased to 57.7 from 57.8 in June, and now we have statistics for the services sector two days later. The composite PMI, which is a blend of the manufacturing and services indices, increased to 61.9 in July from 59.4 in June as a direct result of the strong increase in the services PMI.July’s services PMI jump can be attributed to a rise in new orders brought on by improved demand.
Approximately 29% of respondents to a study conducted by S&P Global reported increased intakes of new business in July, the highest percentage in more than 13 years.Demand increased most in Bangladesh, Nepal, Sri Lanka, and the United Arab Emirates, which together accounted for the second-highest increase in international orders since the series began in September 2014.Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, remarked, “The broad increases in sales across the domestic and international markets are particularly welcoming news, especially in light of the challenging global economic scenario.”S&P Global reported that its poll found that hiring had remained at a pace “broadly similar” to that seen in May and June, despite the fact that pressure on service providers’ capacity had increased only marginally in July.
