5th December 2024: India’s services sector continued to show strong performance in November, according to the latest PMI data released on December 4. The HSBC India Services Business Activity Index slightly dipped to 58.4 in November from 58.5 in October, indicating steady growth despite a slight slowdown in sales growth. A score above 50 on the Purchasing Managers’ Index (PMI) signals expansion, and the November reading reflects continued robust activity in the sector.
Despite the small decline, the services sector recorded significant gains in employment, with job creation reaching its fastest pace since the survey began in 2005. This growth in employment highlights the strong demand for services, which has been a key driver of expansion. Survey respondents also noted an increase in international demand, with new export orders rising at the fastest rate in three months, although still below mid-year levels.
Private sector companies reported that strong demand fueled the growth of new business and output in November. However, the rise in sales also led to increased pressure on capacity, prompting firms to hire more staff. As companies expanded their workforce, input costs also rose, driving inflationary pressures. Both overall expenses and output charges surged to their highest rates in 15 months and nearly 12 years, respectively.
Despite these challenges, business confidence remained high. Service providers are optimistic about the year ahead, with confidence reaching its highest point since May. Expectations of continued strong demand and the effectiveness of marketing efforts contributed to the positive outlook for future business activity.
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