HSBC: Services sector recovered from 26-month low on new orders, employment growth fastest in 20 years

New Delhi| The country’s services sector managed to recover from a 26-month low in February, 2025 due to new orders from domestic and international markets. The sharp expansion in production and the substantial increase in employment increased the activities of the service sector to 59. The HSBC India Services PMI business activity index had fallen to a 26-month low of 56.5 in January.

Pranjul Bhandari, chief India economist at HSBC, said global demand, which grew at the fastest pace in six months, played a major role in boosting production for India’s services sector. Companies in the service sector received more orders from Africa, Asia, Europe, America and Central Asia.

Service sector companies continued recruitment drives to handle the growing new business and reduce capacity pressure. Employment showed the sharpest growth since December, 2005, that is, in 20 years. Business sentiment remains positive despite falling to its lowest level since August, 2024, Bhandari said. Advertising, better customer relationships, increased efficiency and healthy demand conditions have combined to underpin encouraging projections for production in the coming year. On the prices front, HSBC’s chief economist said cost pressures in the private sector have increased at the slowest pace since October last year.