What Does India’s Services PMI of 58.9 in October Indicate About Business Confidence?
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Synopsis
India's services PMI reached an impressive 58.9 in October, reflecting strong growth in services and new business. Despite some challenges, firms remain optimistic about future business activity. Discover how this data shapes the economic outlook for India in the coming months.
Key Takeaways
- PMI of 58.9 indicates strong growth in services.
- GST relief has positively impacted operating conditions.
- New business inflows are increasing, reflecting robust demand trends.
- Firms remain optimistic about future business activity.
- Manufacturing sector also shows strong growth with a PMI of 59.2.
New Delhi, Nov 6 (NationPress) India’s services Purchasing Managers' Index (PMI) recorded a robust 58.9 in October, indicating strong growth in both services output and new business, according to data released on Thursday.
The seasonally adjusted HSBC India Services PMI Business Activity Index remained significantly above the neutral benchmark of 50.0 and the long-term average of 54.3.
While factors such as robust demand and GST (Goods and Services Tax) relief contributed positively to operating conditions, challenges like intense competition and adverse weather conditions limited growth, as noted in the report.
Nonetheless, businesses expressed strong optimism regarding increased activity over the next year, the data revealed.
“The services PMI continues to perform well above the neutral threshold of 50.0 and its historical average. Input costs rose at the slowest pace in 14 months, offering some respite to businesses,” stated Pranjul Bhandari, Chief India Economist at HSBC.
New business inflows increased significantly, albeit at the slowest rate in five months. Companies continued to report robust demand trends and effective marketing strategies.
“International demand for Indian services saw further improvement, indicated by a rise in external sales. Although the growth rate was solid, it was the weakest since March,” the report highlighted.
Indian services firms are looking ahead with positivity, anticipating growth in activity alongside expectations of sustained demand. Opportunities for growth were identified in advertising, increased client inquiries, and competitive pricing strategies.
In a related development, India’s manufacturing sector also reported strong growth in October, driven by robust domestic demand, GST 2.0 reforms, productivity enhancements, and increased technology investments.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) surged to 59.2 in October from 57.7 in September, as reported by S&P Global.
The uptick was attributed to faster growth in new orders and factory output at the start of the third financial quarter, supported by heightened advertising and recent GST reforms.
Point of View
It is evident that India's economy is showing resilience, particularly in the services sector, as indicated by the PMI figures. While challenges remain, the overall sentiment among businesses is one of optimism, which is essential for sustainable growth. The ongoing reforms and demand trends bode well for the future.
NationPress
06/11/2025
Frequently Asked Questions
What does a PMI of 58.9 indicate?
A PMI of 58.9 indicates strong growth in the services sector, as values above 50 suggest expansion.
What factors contributed to the PMI growth?
Factors include robust demand, GST relief, and improved operating conditions, despite challenges like competition and weather.
How do businesses feel about future growth?
Businesses are optimistic about future growth in activity, supported by positive demand trends.
What is the significance of the PMI trend?
The PMI trend is a key indicator of economic health, influencing investment decisions and policy-making.
What is the current state of India's manufacturing sector?
India's manufacturing sector also reported strong growth, with a PMI increase to 59.2 in October, driven by domestic demand.
