Is India’s Services Sector Experiencing Unprecedented Growth in May?
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Synopsis
India's services sector showcases remarkable growth in May, driven by export demand and record-level hiring. The HSBC survey highlights the surge in international demand, prompting firms to expand their workforce significantly. Discover how this trend reflects broader economic conditions and impacts the market.
Key Takeaways
- India's services sector shows remarkable growth with a PMI of 58.8.
- Record levels of hiring were reported due to rising export demand.
- International demand for services is at a near-record high.
- Inflation in input costs and output charges is increasing.
- Strong client acquisition supports business expansion.
New Delhi, June 5 (NationPress) The activity within India's services sector maintained a remarkable pace of expansion in May, fueled by robust demand for exports. This surge also led to a record-breaking increase in staff hiring by companies, according to the most recent HDBC survey.
The seasonally adjusted HSBC India Services PM Business Activity Index recorded a score of 58.8 in May, closely mirroring April's figure of 58.7. This indicates a sustained sharp rate of growth. The expansion was largely attributed to favorable demand conditions, acquisition of new clients, and increased staffing capabilities, as per the survey findings.
Companies witnessed a significant rise in international demand for their services throughout May. The survey highlighted that only during May and June of 2024 were quicker increases in new export orders noted in its 19-and-a-half-year history. In terms of growth sources, firms pointed to regions like Asia, Europe, and North America.
In line with output trends, the volume of new orders increased sharply, reflecting similar patterns observed from February to April. To manage the growing influx of new business, service providers continued to enhance their workforce, the survey noted.
Price metrics indicated a rise in both input costs and output charge inflation, with increases surpassing historical averages.
Pranjul Bhandari, Chief India Economist at HSBC, commented, "India's services PMI reached 58.8 in May 2025, consistent with the stable readings from recent months. The ongoing strong international demand has been a key driver of services activity, as shown by the uptick in the new export business index since April."
"To meet the escalating demand, service providers in India significantly ramped up hiring, resulting in the employment index hitting a record high for this survey. Concurrently, price pressures intensified, with both input prices and charged prices rising last month," Bhandari added.
Point of View
I believe the latest findings from the HDBC survey underscore India's resilience and adaptability in a competitive global market. The surge in services activity and hiring reflects a strong economic outlook, bolstered by international demand. This growth not only enhances employment opportunities but also solidifies India's position on the global stage.
NationPress
10/06/2025
Frequently Asked Questions
What is the significance of the PMI score?
The PMI score of 58.8 indicates strong growth in the services sector, suggesting robust economic activity and confidence among businesses.
How does international demand affect hiring?
Increased international demand leads to higher business activity, prompting companies to expand their workforce to meet the growing needs.
What regions are driving export demand?
The survey highlighted significant contributions from Asia, Europe, and North America in driving export demand for Indian services.
