Services Sector PMI
– Photo: istock
Expansion
The country’s services sector growth accelerated in June from a five-month low in May amid an unprecedented expansion in international sales and a robust rise in new orders. The HSBC India Services Business Activity Index rose to 60.5 in June from 60.2 in May. In Purchasing Managers’ Index (PMI) parlance, a score above 50 means expansion, while a score below 50 indicates contraction.
Pranjul Bhandari, chief India economist at HSBC, said, “Activity growth in India’s services sector accelerated in June, with the index rising 0.3 ppt (percentage points) to 60.5, driven by a rise in both domestic and international new orders. This encouraged services sector firms to increase their workforce levels at the fastest pace since August 2022.”
Growth was driven by strong demand and new business. New orders to Indian service providers continued to grow steadily in June, extending the current expansion to nearly three years. International orders also saw record expansion. The Indian services sector received work from Asia, Australia, Europe, Latin America, the Middle East and the US.
Positivity from customers encouraged service providers in India to hire additional staff at the end of the first financial quarter. Employment levels in the services sector grew at the fastest pace since August 2022, as short-term and permanent workers were taken on for new tasks.
On the price front, average expenses of service providers rose marginally due to higher food, fuel and labour costs. The pace of inflation was still the weakest in four months. Following this, selling prices also rose at the slowest pace since February.