India's services activity touches an eleven-year high of 59.2 in June

According to S&P, unrelenting inflation continued to concern businesses, who were cautiously optimistic about the year-ahead outlook for business activity. The overall level of sentiment was well below its long-run average as only 9 per cent of companies forecast output growth.

For the eleventh straight month, the services sector witnessed an expansion in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.The jump in the services PMI corroborates the view that the services sector will lead the growth recovery in FY2023.

On the job front, some companies responded to capacity pressures by hiring additional staff in June, but the vast majority (94 per cent) left payroll numbers unchanged. Overall, services employment rose marginally, following a decline in May.

In the meantime, the S&P Global India Composite PMI Output Index-which measures combined services and manufacturing output - was at 58.2 in June, little changed from 58.3 in May.

"Growth of Indian private sector output steadied in June, as a faster increase in services activity offset a slower rise in factory production," the survey said.