June Sees Indian Services Sector Surge to 10-Month High Driven by Strong New Business Growth: PMI Insights

New Delhi: Services Sector Reaches New Heights

The Indian services sector saw significant growth in June, reaching its highest point in ten months. This boost came from strong international sales and increased job opportunities, reflecting positive demand trends.

The seasonally adjusted HSBC India Services PMI Business Activity Index climbed from 58.8 in May to 60.4 in June. This increase was largely driven by a notable rise in new business orders. According to the Purchasing Managers’ Index (PMI) system, a score above 50 indicates growth, while anything below signifies a decline.

Pranjul Bhandari, Chief India Economist at HSBC, noted that new domestic orders surged, with exports also on the rise, albeit at a slower speed. The costs of inputs grew, but at a rate less than that of output prices, which helped to improve company margins.

The demand for services particularly thrived from both the domestic market and increased export business, especially from Asia, the Middle East, and the United States. This robust demand contributed to an increase in employment for the 37th consecutive month in June, though the pace of job growth slightly decreased from May’s record highs.

On the cost front, the survey highlighted that pressure was most intense in consumer services, while the finance and insurance sectors saw the fastest increases in prices charged. Interestingly, optimism about future output remains, with 18% of service providers expecting growth in the next year, although this is the lowest level of confidence since mid-2022.

Bhandari pointed out that while service providers continue to be hopeful about growth, their confidence has waned somewhat.

Additionally, the HSBC India Composite PMI Output Index rose from 59.3 in May to 61 in June, marking the fastest expansion rate in 14 months. This index reflects a balance between the manufacturing and services sectors according to GDP data. Notably, prices charged by private sector companies increased at the slowest rate in three months at the end of the first fiscal quarter.

Overall, the data suggests a mixed but encouraging outlook. While confidence among service providers has softened slightly, the robust performance in job creation and demand indicates continued growth potential for India’s service sector. For more details about the services sector’s performance, you can refer to the HSBC India Services PMI.

In summary, the Indian services sector is not only bouncing back but also adapting to new market dynamics, showcasing resilience amidst challenges.

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HSBC INDIA SERVICES PMI, BUSINESS ACTIVITY INDEX, PMI, INDIAN SERVICES SECTOR GROWTH TOUCHES 10 MONTH HIGH IN JUNE ON SHARP UPTURN IN NEW BUSINESS PMI