The services sector index touched a 12-year high of 59.4 in February supported by strong demand and easing of price pressures amid mild job creation in the country, a monthly survey showed.

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 59.4 in February from 57.2 in January, its highest since February 2011. The headline figure has been in the expansion zone for the 19th consecutive month since August 2021.

In Purchasing Managers’ Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.

“The service sector more than regained the growth momentum lost in January, posting the sharpest expansion in output for 12 years as demand resilience and competitive pricing policies underpinned the joint-best upturn in sales over the same period,” said Pollyanna de Lima, economics associate director at S&P Global Market Intelligence.

On the prices front, there was substantial moderation in cost pressures as input prices increased at the slowest pace in nearly two-and-a-half years and output charge inflation softened to a 12-month low.

New orders placed with service providers rose further in February, with several firms suggesting that competitive pricing boosted sales, the survey said. Still, capacity pressures remained mild and jobs rose only marginally, it added.

“Despite the strong upturn in new business intakes, service providers noted only mild pressure on their capacities and, as a result, a large proportion of firms left payroll numbers unchanged,” Lima said, adding that hiring growth was also dampened by a lack of confidence in the business environment.

The degree of optimism recorded in February was the lowest for seven months and below the historical trend as some companies doubted demand would remain this resilient. Others displayed concerns surrounding fierce competition for new work.