Services Sector In India Logs Fastest Growth In 6 Months, PMI Touches 61.8 In Jan

The January data showed that the Indian private sector logged a faster pace of growth in output, as goods and services producers, both, registered swifter increases

The services sector in India logged the fastest pace of growth in six months in January, helped by strong demand from domestic and external customers, a survey revealed on Monday. 

The HSBC India Service Purchasing Managers’ Index (PMI) climbed to 61.8 in January, marking the sharpest growth rate in six months, reported PTI. Comparatively, the seasonally adjusted index stood at 59 in December. 

The index, compiled by S&P Global, is put together on the basis of responses to questionnaires shared with a panel of nearly 400 service sector firms. A score of above 50 on the index denotes expansion, while one below 50 represents contraction. 

The January data showed that the Indian private sector logged a faster pace of growth in output, as goods and services producers, both, registered swifter increases.

Commenting on the data, Ines Lam, Economist, HSBC, said, “New business expanded at a faster pace and managers' expectation for future activity was strong. The new export business index accelerated, signalling that India's services exports remained robust.”

New export sales also increased at the fastest pace seen in three months for the country. The companies studied found that customers across the world including Afghanistan, Brazil, China, Europe, the UAE, and the US, reported gains. 

The respondents further found an overall rise in their expenses at the start of the 2024 calendar year, with food, freight, and labour majorly contributing to the cost. However, the survey revealed that the majority of the respondents chose to keep charges unchanged, and about 6 per cent increased them, resulting in the output prices climbing to the least extent in 11 months. 

Business confidence also strengthened, the survey found. In addition to a strong demand, the firms also anticipate investment and productivity improvements to result in output growth in the year. 

The HSBC India Composite PMI Output Index increased from 58.5 in December to 61.2, marking the sharpest growth seen since mid-2023. Notably, composite PMI indices comprise of weighted averages of manufacturing and services PMI indices. The weights represent the relative size of both sectors on the basis of the official GDP data.