India’s services sector stays on fast growth track in May, hiring at all-time high: Survey
India’s services sector activity kept up its high pace of growth in May, driven by a strong demand for exports
- NEW DELHI — India’s services sector activity kept up its high pace of growth
in May, driven by a strong demand for exports, which also saw hiring of staff
by firms surge to an all-time high during the month, according to the latest
HSBC survey.
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- Registering 58.8 in May, the seasonally adjusted HSBC
India Services PM Business Activity Index -- based on a single question asking
how the level of business activity compares with the situation the month before
-- was broadly in line with April's reading of 58.7 (PMI) and therefore
signalled another sharp rate of expansion. Growth was reportedly underpinned by
healthy demand conditions, new client wins and greater staffing capacity, the
survey states.
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- Notably, companies observed a near-record improvement in
international demand for their services during May. Over the course of the
survey's 19-and-a-half-year history, faster increases in new export orders were
only recorded in May and June 2024. When citing sources of growth, firms
mentioned Asia, Europe and North America in particular, the survey said.
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- Similar to the trend for output, new orders rose at a
sharp pace that was largely aligned with those registered from February to
April. To accommodate for ongoing expansions in new business intakes, service
providers continued to recruit additional staff, the survey added.
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- Price gauges showed an intensification of input cost and
output charge inflation, with rates of increase edging above their historical
averages in each case.
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- Pranjul Bhandari, Chief India Economist at HSBC, said:
"India registered a 58.8 services PMI in May 2025, broadly in line with
the steady readings from recent months. Strong international demand continued
to fuel services activity, as evidenced by the new export business index’s uptick
from April.”
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- “To keep up with swelling demand, India’s service
providers heavily increased staff recruitment. Indeed, the employment index
rose to the highest reading ever recorded by this survey. Meanwhile, price
pressures continued to intensify with input prices and charged prices both
rising last month," Bhandari added.
