Services PMI: India’s services sector growth in January slowest in more than two years
New Delhi| India’s services sector growth grew at its slowest pace in more than two years in January amid slow growth in sales and production. This has been said in a monthly survey released on Wednesday. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.3 in December to 56.5 in January-its lowest level since November.
In the language of the Purchasing Managers’ Index (PMI), a score above 50 represents expansion, while a score below 50 represents contraction. “India’s services sector lost the pace of growth in January”, said Pranjul Bhandari, HSBC’s chief economist for India. PMI remained well above the 50-break-even level though. Business activity and new business PMI indices fell to their lowest levels since November 2022 and November 2023, respectively.
In contrast to the trend in total new orders, international sales increased sharply. Participants surveyed mentioned benefits from customers in Asia, Europe, the Middle East and the Americas. The overall rate of expansion reached a five-month high.
Bhandari said, “… New export turnover partially countered the decline and continued to recover from the decline in late 2024, which is in line with official figures. These data showed India’s services sector exports have grown in December and are gaining a larger share of global trade” The survey said continued improvement in new business and increasing capacity pressure prompted service providers to recruit additional staff early in the last financial quarter.
According to the survey, appointments have been made to full-time and part-time posts. The rate of job creation accelerated from December and remained the fastest rate since data collection began in December 2005. Service providers in India are confident of growth in business activity in the coming 12 months. The reasons for this trust are advertising, competitive pricing efforts, and new customer inquiries.
At the same time, the HSBC India Composite Output Index fell to a 14-month low of 57.7 from 59.2 in December. The composite PMI index is a weighted average of the manufacturing and services PMI indices. The weights reflect the relative size of the manufacturing and service sectors according to official GDP data. HSBC India Services PMI is compiled from responses to a questionnaire sent by S&P Global to a panel of around 400 service sector companies.
