Ines Lam, Economist at HSBC, said, “India’s services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity.”
India’s services activity recorded a strong growth in March, with the final HSBC India Services Purchasing Managers’ Index, compiled by S&P Global, rising to 61.2 as against 60.6 in February. This pointed to one of the strongest growth rates seen in over 13-and-a-half years. The upturn was largely attributed to healthy demand conditions, efficiency gains and positive sales developments, a release by S&P Global said on Thursday.
Ines Lam, Economist at HSBC, said, “India’s services PMI rose in March, following a small dip in February, on the back of strong demand that spurred sales and business activity. Service providers increased hiring at the fastest pace since August 2023 in order to expand production capacity. Input costs rose at a faster rate, yet service providers were able to broadly maintain margins by charging higher output prices.”
Per the release by S&P Global, buoyant demand for Indian services created a cascade of positivity for the sector at the end of the current fiscal year. March saw one of the strongest expansions in total sales and business activity in close to 14 years, helped by a series record upturn in new export orders. “The downside to the uptick in growth momentum was an intensification of price pressures, with both input costs and output charges increasing at faster rates,” it said.
The rate of growth, it said, was one of the best seen since June 2010. That put the reading above the 50-mark separating growth from contraction for a 32nd consecutive month.
Per the data released by S&P Global, March showed better demand for Indian services from domestic and international sources. New export business rose at the fastest rate since the series started in September 2014. Survey participants reported gains from Africa, Asia, Australia, Europe, the Americas and the Middle East. It stated that there were quicker increases in output and sales across each of the four broad areas of the service economy monitored by the survey, with finance & insurance topping the growth rankings in both cases.
Amid reports of higher labour and material costs, there was a further increase in overall expenses at services firms. The combination of rising cost pressures and demand strength encouraged companies to lift their selling prices in March. The rate of charge inflation climbed to its highest mark since July 2017.
Further, services companies said that the substantial upturn in new business volumes added pressure on their capacities, in response to which, service providers recruited additional staff in March. The latest increase in employment was the twenty second in as many months, and the joint-strongest since November 2022.
Per the data, March pointed to a sharp increase in aggregate output across India, as both goods producers and service providers noted a pick-up in growth. The HSBC India Composite PMI® Output Index rose from 60.6 in February to 61.8 in March, highlighting the second-strongest upturn in over 13-and-a-half years (behind July 2023).
Source:financialexpress.com