India’s Services Sector Grows Faster in June: HSBC India Services PMI Report

New Delhi [India], July 3: India’s services sector saw sustained growth in June, with the rate of expansion increasing from May’s five-month low. This growth was driven by a stronger rise in new orders and an unprecedented expansion in international sales, according to the HSBC India Services PMI survey.

Staffing levels at companies increased at the fastest pace since August 2022, with both short-term and permanent staff being hired to support new work. The survey noted, “Positive client appetite encouraged service providers in India to recruit additional staff at the end of the first fiscal quarter. The pace of job creation was marked and the strongest in 22 months.”

Despite higher food, fuel, and labor costs, service providers recorded a moderate increase in their average expenses. However, the pace of inflation was the weakest in four months, and selling prices rose at the slowest pace since February.

The seasonally adjusted HSBC India Services Business Activity Index rose from 60.2 in May to 60.5 in June, indicating a sharp expansion in services output. The growth rate was faster than in May and well above its long-run average. The upturn in new business was supported by a record expansion in international orders, with destinations including Asia, Australia, Europe, Latin America, the Middle East, and the US.

Pranjul Bhandari, Chief India Economist at HSBC, stated, “Overall, service providers remain confident about the year ahead business outlook, although the level of optimism moderated sharply during the month. The Composite PMI also accelerated in June, supported by greater inflows of new orders. Manufacturing firms contributed more to the expansion than services firms.”