India’s Services Sector Grows in July: HSBC Report
In July, India’s services sector experienced significant growth in business activity, according to the HSBC India Services PMI data. The growth was driven by investments in technology, online offerings, new business gains, and strong demand.
The report highlighted the third-fastest expansion in international sales in nearly ten years, with new export orders increasing due to rising demand from countries like Austria, Brazil, China, Japan, Singapore, the Netherlands, and the US.
However, higher wage and material costs pushed up business expenses, leading to the steepest rise in service prices in seven years. The seasonally adjusted HSBC India Services Business Activity Index was at 60.3 in July, slightly down from 60.5 in June but still above the neutral mark of 50.0 for the 36th consecutive month.
Pranjul Bhandari, Chief India Economist at HSBC, noted that robust demand conditions led to increased hiring levels. Looking ahead, around 30% of survey respondents expect greater output volumes in the next 12 months, while only 2% foresee a decline. Confidence in demand and sales, along with improved customer engagement, boosted optimism among service firms.
Doubts Revealed
Services Sector -: The services sector includes businesses that provide services rather than goods. Examples are banks, hotels, and IT companies.
HSBC -: HSBC is a big international bank. It stands for Hongkong and Shanghai Banking Corporation.
PMI -: PMI stands for Purchasing Managers’ Index. It measures the health of the economy by looking at new orders, inventory levels, production, supplier deliveries, and employment.
Neutral mark -: In PMI, the neutral mark is 50. If the PMI is above 50, it means the sector is growing. If it’s below 50, it means the sector is shrinking.
Export orders -: Export orders are requests for goods or services from other countries. It means other countries want to buy what India is offering.
Austria -: Austria is a country in Europe. It is known for its beautiful mountains and classical music.
Brazil -: Brazil is a large country in South America. It is famous for the Amazon rainforest and football.
China -: China is a big country in Asia. It has the largest population in the world and is known for its Great Wall.
Japan -: Japan is an island country in Asia. It is known for its technology, sushi, and cherry blossoms.
Singapore -: Singapore is a small island city-state in Asia. It is known for its cleanliness and modern buildings.
The Netherlands -: The Netherlands is a country in Europe. It is famous for its windmills, tulips, and canals.
The US -: The US stands for the United States of America. It is a large country in North America known for its diverse culture and economy.
Output -: Output means the amount of goods or services produced by a company or sector.