India’s services sector records sharp expansion in January, surge in hiring: HSBC
There was a sharp expansion in India's services business activity during January this year, although the growth rate was slower than December, according to the HSBC India PMI survey
- NEW DELHI — There was a sharp expansion in India's services business activity
during January this year, although the growth rate was slower than December,
according to the HSBC India PMI survey released on Wednesday.
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- Several services companies linked output growth to
favourable demand conditions, new business wins and investment in technology.
However, a few firms suggested that activity levels at their units were
constrained by a fall in customer numbers, the survey states.
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- At 56.5 in January, the seasonally adjusted HSBC India
Services PMI Business Activity Index indicated a sharp rate of expansion.
However, the headline figure was down from 59.3 in December, the survey stated.
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- But the rate of job creation accelerated from December
and was among the fastest seen since data collection started in December 2005,
it pointed out.
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- Overall, new business continued to increase strongly. The
rise was attributed to strong demand and decisions to offer better prices than
rivals. Growth was reportedly curbed by intense competition.
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- In contrast to the trend for total new orders, there was a
quicker increase in international sales. Survey participants noted gains from
clients in Asia, Europe, the Middle East, and the Americas, according to the
survey.
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- Service providers in India were confident of a rise in
business activity over the course of the coming 12 months. Qualitative data
showed that advertising, efforts to price competitively, and new client
enquiries were some of the reasons listed for upbeat forecasts. The level of
positive sentiment did fall to a three-month low, but was broadly aligned with
the series trend.
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- Ongoing improvements in new business intakes and rising
capacity pressures prompted service providers to recruit additional staff at
the start of the last fiscal quarter.
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- The rate of inflation was little changed from that seen
around the turn of the year, therefore remaining above its long-run average. As
a result of rising cost burdens and demand resilience, prices charged for the
provision of Indian services increased further at the start of 2025. Having
accelerated from December, the rate of charge inflation was marked and above
its trend, the survey added.
