India's Service Sector Experiences Significant Growth, Reaches 4-Month Peak in December: Report
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New Delhi, Jan 6 (NationPress) The growth of India's service sector has surged to a 4-month record in December, attributed to robust demand that fueled business operations, along with notable job creation within the month, as indicated by a survey released on Monday.
The HSBC India Services Purchasing Managers' Index, prepared by S&P Global, rose to 59.3 in December from 58.4 in November, marking the highest level since August.
Companies identified strong underlying demand as the key factor driving output growth in the services sector. Some survey participants mentioned that recent initiatives to expand their capacities enabled them to take on more work.
The overall level of positive sentiment remained above its long-term average, with service providers expressing confidence that output would continue to rise over the next 12 months. Factors such as expanded capacities, new customer inquiries, and increased marketing budgets were instrumental in fostering growth.
While service companies continued to face rising business expenses in December, the rate of inflation decreased from November's 15-month peak. In response to a further increase in input costs, service providers also raised their fees in December.
The combination of new business growth, optimistic forecasts, and increasing capacity pressures led to another wave of job creation across the services sector. Companies continued to hire at one of the strongest rates since the survey's inception in 2005, although hiring was slightly lower than November's 19-year high.
There was a significant rise in international orders received by service providers in December, which bodes well for employment and growth in the upcoming months.
Ines Lam, an economist at HSBC, noted, "Forward-looking indicators such as new business and future activity suggest that the strong performance will likely persist in the near term."
The robust expansion in services activity also compensated for a decline in manufacturing growth, elevating the overall Composite PMI to 59.2 in December from 58.6 in November, thereby enhancing the overall economic growth rate.
