Services PMI falls to 58.1 in February: What's the reason?
04 Mar 2026

India's services sector growth has slowed down in February, with the Purchasing Managers' Index (PMI) slipping to a two-month low of 58.1 from January's 58.5.

The PMI is a key indicator of economic activity, with readings above 50 indicating expansion and those below indicating contraction.

Despite this slight dip, the services PMI has mostly stayed in expansion mode for over a year now, consistently remaining above the crucial 50 mark that separates growth from contraction.

Services PMI peaked in mid-2022
PMI fluctuations

The services PMI peaked in mid-2022, hitting a high of 60.7 in June and staying strong at 60.5 in July.

It reached a cycle high of 62.9 in August before easing off in the following months.

The index dipped toward the end of last year, falling to 58.0 in December, before recovering slightly to 58.5 in January and then dipping again this month.

Contrasting trends for manufacturing and services sectors
Sector performance

The slight dip in services activity is at odds with the manufacturing sector's performance.

The manufacturing PMI surged to a four-month high of 56.9 in February, indicating stronger production momentum despite the slight moderation in services activity.

This contrast highlights the different trajectories of these two key sectors of India's economy during this period.

Official data shows robust growth in services and manufacturing
Economic expansion

Despite the month-to-month fluctuations in PMI readings, official national accounts data show that both the services and manufacturing sectors are continuing to grow strongly.

Services output grew 9.5% in the October-December quarter, up from 9.3% in the previous quarter.

Manufacturing also posted robust gains with a growth of 13.3% in Q3 as compared to 13.2% in July-September period, reinforcing its role as a key driver of overall growth.