Services activity in India saw one of the strongest growth rates in over 13-and-half years. Buoyant demand for Indian services created positivity for the sector at the end of the fiscal year.
HSBC India Services PMI is compiled by S&P Global stated: “Rising from 60.6 in February to 61.2 in March, the seasonally adjusted HSBC India Services Business Activity Index 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.”
The report stated that March saw one of the strongest expansions in total sales and business activity, close to 14 years, helped by a series record in new export orders. Increased pressure on the capacity of service providers supported the joint-fastest rise in employment since November 2022.
"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,” said Ines Lam, Economist at HSBC.
India’s services PMI activity data comes a day after the manufacturing PMI for March that was recorded at a 16-year high of 59.1.
S&P, in the report, added that there was a substantial improvement in new order intakes in March, and the rate of growth was one of the best since June 2010. March witnessed better demand for Indian services from domestic and international sources.
Exports grew at the fastest rate since September 2014 with gains from Africa, Asia, Australia, Europe, the Americas and the Middle East.
The survey further noted that there has been an intensification of price pressures, with both input costs and output charges increasing at faster rates.
Substantial upturn in new business volumes added pressure on the capacities of services companies, and pending workloads increased for the 27th month straight, and the greatest extent since the start of 2023. This led to service providers recruiting additional staff in March. The latest increase in employment was the 22nd in as many months, and the joint-strongest since November 2022, the report added.