India’s Services PMI Boom, Hits Four-Month High
India’s services sector recorded a four-month high in activity in October, with the HSBC India Services Purchasing Managers’ Index (PMI) rising to 55.8 from 55.2 in September, according to data released by S&P Global on Wednesday. The expansion was driven principally by robust domestic demand and a marked increase in new business orders.
The seasonally adjusted Business Activity Index remained well above the 50-point threshold that separates growth from contraction, indicating a sustained expansion in output. Favourable market conditions, effective advertising efforts and the acquisition of new clients supported growth, with sales rising at their strongest pace since June. Domestic buyers constituted the primary engine of expansion, while international sales grew only marginally, at the slowest rate in nearly four years.
Commenting on the findings, Pranjul Bhandari, Chief India Economist at HSBC, noted that business conditions showed a cautious improvement as the services PMI reached a four-month high. She observed that, although headline demand remained firm, new export orders grew at their weakest pace since February 2023. She added that employment growth moderated to its lowest level since June, suggesting that service providers generally held sufficient workforce capacity to meet current operational requirements.
The sector also witnessed a considerable easing of cost pressures during the month. Input price inflation declined to its lowest level since August 2020, while the rate of increase in prices charged to customers was the softest since June.
