Is India’s Services Sector Activity Reaching New Heights in June?
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Synopsis
In June, India's services sector experienced a significant surge, marking a 10-month high driven by strong demand locally and abroad. This growth signals a positive trend for employment and economic confidence, despite some challenges. Discover the details of this compelling survey from HSBC.
Key Takeaways
- The services sector in India reached a 10-month peak in June.
- PMI index rose significantly, indicating robust growth.
- New orders expanded rapidly, benefiting from strong domestic and export demand.
- Employment growth continued, surpassing long-term averages.
- Despite challenges, optimism remains for future output growth.
New Delhi, July 3 (NationPress) The expansion of India's services sector activity reached a remarkable 10-month peak in June, spurred by vigorous demand from both local and international markets, as highlighted in an HSBC survey published on Thursday.
The seasonally adjusted HSBC India Services PMI Business Activity Index, prepared by S&P Global, climbed from 58.8 in May to 60.4 in June. The PMI baseline of 50.0 signifies a neutral point that differentiates growth from contraction on the index.
New orders increased at the fastest pace since August 2024. Service providers reaped the benefits of the sustained strength in the domestic market, coupled with a notable rise in new export business. Demand from overseas, particularly from Asian, Middle Eastern, and US markets, showed significant improvement, according to survey participants.
The ongoing growth of the Indian services sector positively influenced hiring practices. Employment rose for the thirty-seventh consecutive month in June, with the job growth rate surpassing its long-term average, albeit lower than the record high observed in May.
The input cost inflation rate across India's service economy eased to its lowest point in ten months in June, remaining below its long-term average. Although it declined from May, the rate of charge inflation stayed above the series trend. Outstanding business grew at a modest rate, still faster than in May.
The survey indicated that optimism about output levels for the upcoming year was maintained, with 18% of service providers anticipating growth. However, this percentage of optimistic firms was the lowest since mid-2022, leading to a decline in overall confidence below its long-term average.
The HSBC India Composite PMI, which merges services and manufacturing activities, increased to 61.0 in June from 59.3, marking the most rapid expansion in 14 months. The manufacturing PMI data released this week indicated that manufacturing activity growth accelerated in June, aligning with the robust performance of the services sector.
Point of View
I believe that the recent surge in India's services sector activity is a promising indicator of economic resilience. While challenges remain, the consistent growth and increasing employment rates highlight the sector's vital role in our economy. We must remain vigilant and continue to support initiatives that foster this growth for a sustainable future.
NationPress
03/07/2025
Frequently Asked Questions
What was the PMI index for India's services sector in June?
The PMI index for India's services sector rose to 60.4 in June, up from 58.8 in May.
How did new orders perform in June?
New orders expanded at their fastest rate since August 2024, reflecting strong demand.
What impact did the services sector growth have on employment?
Employment increased for the thirty-seventh consecutive month in June, indicating a positive trend in job creation.
What is the outlook for the services sector?
Despite some decline in confidence, 18% of service providers remain optimistic about future growth over the next year.
What does the Composite PMI indicate?
The HSBC India Composite PMI rose to 61.0 in June, reflecting the fastest expansion in 14 months.
