India’s services PMI for January grew at 6-month high driven by strong demand
The survey also highlighted that output prices increased at the slowest pace since February 2023, and optimism reached a four-month peak.
- Feb 5, 2024,
- Updated Feb 5, 2024 11:45 AM IST
India's leading services sector registered its quickest expansion in six months in January, driven by strong demand, revealed a survey by HSBC India Services PMI.
The survey also highlighted that output prices increased at the slowest pace since February 2023, and optimism reached a four-month peak. These indicators suggest that India is set to retain its position as the fastest growing major economy in the forthcoming months.
This development could alleviate pressure on the government, enabling it to concentrate on fiscal consolidation in the coming year. The HSBC final India Services Purchasing Managers' Index, compiled by S&P Global, surged to 61.8 in January, up from 59.0 in December.
The final reading surpassed the preliminary estimate of 61.2, marking the 30th consecutive month of expansion above the 50-mark.
The acceleration of new business and a strong future activity expectation by managers was reported. Ines Lam, Economist at HSBC, "India’s services PMI rose to a six-month high in January. New business expanded at a faster pace and managers’ expectation for future activity was strong. The new export business index accelerated, signaling that India’s services exports remained robust." This has led to firms starting the final quarter of fiscal year 2023-24 with optimism.
The operational costs have surged at the fastest rate since August, however, the prices charged have shown the slowest rise in nearly a year, suggesting a slow-down in inflation.
The overall inflation in the nation has reached a four-month high in December, surpassing the Reserve Bank of India's 4% medium-term target. Combined with robust economic growth, this is likely to prompt the central bank to maintain a steady interest rate for a few months.
The manufacturing sector has seen the quickest growth in four months and the services industry continues to grow robustly.
Also read: HSBC Flash India PMI indicates robust economic conditions continue in January
India's leading services sector registered its quickest expansion in six months in January, driven by strong demand, revealed a survey by HSBC India Services PMI.
The survey also highlighted that output prices increased at the slowest pace since February 2023, and optimism reached a four-month peak. These indicators suggest that India is set to retain its position as the fastest growing major economy in the forthcoming months.
This development could alleviate pressure on the government, enabling it to concentrate on fiscal consolidation in the coming year. The HSBC final India Services Purchasing Managers' Index, compiled by S&P Global, surged to 61.8 in January, up from 59.0 in December.
The final reading surpassed the preliminary estimate of 61.2, marking the 30th consecutive month of expansion above the 50-mark.
The acceleration of new business and a strong future activity expectation by managers was reported. Ines Lam, Economist at HSBC, "India’s services PMI rose to a six-month high in January. New business expanded at a faster pace and managers’ expectation for future activity was strong. The new export business index accelerated, signaling that India’s services exports remained robust." This has led to firms starting the final quarter of fiscal year 2023-24 with optimism.
The operational costs have surged at the fastest rate since August, however, the prices charged have shown the slowest rise in nearly a year, suggesting a slow-down in inflation.
The overall inflation in the nation has reached a four-month high in December, surpassing the Reserve Bank of India's 4% medium-term target. Combined with robust economic growth, this is likely to prompt the central bank to maintain a steady interest rate for a few months.
The manufacturing sector has seen the quickest growth in four months and the services industry continues to grow robustly.
Also read: HSBC Flash India PMI indicates robust economic conditions continue in January