India's services sector experiences robust business growth in July: PMI
Aug 05, 2024
New Delhi [India], August 5 : The services sector in India experienced a further upturn in terms of business activity during July, according to HSBC India Services PMI data released on Monday.
As per the widely-tracked monthly survey, the survey respondents cited investment in technology, online offerings, new business gains and rosy demand as the main drivers of growth.
The third-fastest expansion in international sales for nearly ten years supported another robust increase in overall new business orders.
New export orders increased amid strengthening demand for Indian services from across the world. Some of the sources of rising export orders mentioned by survey panelists included Austria, Brazil, China, Japan, Singapore, the Netherlands, and the US.
"Higher wage and material costs continued to push up business expenses, with the overall rate of inflation quickening from June. Stronger cost pressures and positive demand trends contributed to the steepest rise in prices charged for the provision of services for seven years," the PMI report said.
The seasonally adjusted HSBC India Services Business Activity Index was at 60.3 in July, down only fractionally from 60.5 and above the neutral mark of 50.0 for the thirty-sixth straight month.
"The latest reading was more than six points higher than its long-run average and highlighted a substantial upturn in business activity," the PMI report read.
Looking ahead, services firms remained strongly optimistic about growth prospects. Around 30 per cent of the survey panel forecast greater output volumes in the next 12 months, while only 2 per cent expect a decline.
As per the report, anecdotal evidence suggested that confidence in the outlook for demand and sales, alongside improved customer engagement and new inquiries, boosted optimism.
"Robust demand conditions, reflected by increased new orders from both domestic and international markets, led firms to increase hiring levels," said Pranjul Bhandari, Chief India Economist at HSBC.
"Service sector activity rose at a slightly slower pace in July, with new business increasing further, primarily driven by domestic demand. Looking ahead, services firms remained optimistic about the outlook for year-ahead," Bhandari.
