The country’s services sector touched a 10-month high in June, as per a monthly Purchasing Managers’ Index (PMI), indicating positive demand trends, increase in business orders and improved international sales.
The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.8 in May to 60.4 in June.
The HSBC India Services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 400 service sector companies.
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“The Services PMI business activity index was up to a ten-month high, led by a sharp rise in new domestic orders. New export orders also expanded, albeit at a softer pace. Margins improved, as the rise in input costs was below that seen for output charges,” said Pranjul Bhandari, Chief India Economist at HSBC.
New orders expanded at the quickest rate since August 2024, and services companies benefited most from the continued strength of the domestic market, alongside a marked increase in new export business.
Internationally, demand improved from the Asian, Middle-Eastern and US markets, said the panellists overseeing the survey.
Thursday’s report also implied continued expansion of the service sector, which positively impacted recruitment. Employment too rose for the 37th consecutive month in June, as did the rate of job growth, which was higher than its long-run average despite being slower than May’s record.
Bhandari said service providers remained optimistic about future growth, with 18 per cent of service providers forecasting growth. However, the proportion of upbeat firms was at its lowest since mid-2022.
Price-wise, the survey said cost pressures were most intense in the consumer services category, while upturn in output charges was fasted in the finance and insurance segments.
Meanwhile, the HSBC India Composite PMI Output Index rose from 59.3 in May to 61 in June, indicating the fastest rate of expansion in 14 months.
Composite PMI indices are weighted averages of comparable manufacturing and services PMI indices. Weights reflect the relative size of the manufacturing and service sectors according to official GDP data.
Additionally, prices charged by private sector companies rose at the slowest pace in three months at the end of the first fiscal quarter.
Concurrently, cost burdens increased at the weakest rate since August 2024. For both indicators, slowdowns were broad-based across the manufacturing and service economies.
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