India’s Services Sector Growth Slows in September 2024
The growth of India’s services sector, including new business, international sales, and output, has slowed to its lowest rate since November 2023, according to the HSBC India Services PMI report. The report, compiled by S&P Global, indicates that while the sector continues to expand, the pace has softened. The index value fell from 60.9 in August to 57.7 in September, remaining above the neutral mark of 50.0, which signifies growth.
One of the factors contributing to the slower growth was a reduced increase in new export orders, marking the weakest expansion in 2024 so far. Despite this, some companies reported gains from regions such as Asia, Europe, North America, the Middle East, and the US.
Pranjul Bhandari, Chief India Economist at HSBC, noted that the new business index followed a similar trend to the headline figure, suggesting potential softer output growth in the future. She also mentioned that services companies’ margins might be under pressure as prices charged rose at a slower rate while input cost inflation increased. The strong demand for labor continues due to the prolonged period of robust new business growth.
In contrast, India’s manufacturing sector experienced a decline for the second consecutive month in September, with the PMI data showing a broader trend of moderation in growth. The average PMI reading for the manufacturing sector hit its lowest level since the three months ending December 2023, attributed to factors like fierce competition and a softer increase in new export orders.
Doubts Revealed
Services Sector -: The services sector includes businesses that provide services rather than goods, like banking, education, and healthcare. It’s important for the economy because it creates jobs and helps people meet their needs.
HSBC -: HSBC is a big international bank that provides financial services like saving money, giving loans, and helping with investments. They often study and report on economic trends.
PMI -: PMI stands for Purchasing Managers’ Index. It’s a number that shows how well a sector, like services or manufacturing, is doing. A number above 50 means growth, while below 50 means decline.
Export Orders -: Export orders are requests from other countries to buy goods or services. When these orders increase, it means more business for the country exporting them.
Margins -: Margins refer to the difference between the cost of making something and the price it’s sold for. If margins are under pressure, it means costs are rising or prices are falling, affecting profits.
Manufacturing Sector -: The manufacturing sector involves making products from raw materials, like cars, clothes, and electronics. It’s important for creating jobs and products that people use every day.
