New Delhi, November 4 (IANS). India's services sector recorded its fastest growth in four months in October driven by strong demand and a surge in new orders. According to the latest Purchasing Managers' Index (PMI) data from HSBC, the PMI of the services sector increased from 55.2 in September to 55.8 in October. This is the highest level in the last four months and indicates continued strong business activity in the services sector.
Services PMI level being above 50 indicates expansion in economic activities. In October it not only remained well above the neutral level of 50, but also recorded a better performance than its long-term average. Another positive sign was that input cost inflation reached its lowest level since August 2020. Along with this, the pace of increase in charges charged by service providers from customers was also the weakest since June.
The composite PMI, prepared by combining both service and manufacturing sectors, increased from 55.9 in September to 56.2 in October. This represents the fastest growth in aggregate economic output in the last four months and signals strong business activity in the country.
HSBC Chief India Economist Pranjul Bhandari said India's services sector PMI rose to 55.8 in October, the highest level in four months. He said that a cautious improvement has been seen in business conditions. Although aggregate demand remained strong, the growth rate of export orders was the slowest since February 2023.
Both input and output prices continued to rise, but at a slower pace than in September, indicating some relief in inflationary pressures, he said.
According to the PMI survey, all four core sectors of the services economy recorded strong growth in new business and output, with the finance and insurance sectors leading the way, while the real estate and business services sector lagged behind.
The data also showed that the main source of sales growth in October was the domestic market. Demand from Indian consumers and businesses contributed significantly to the expansion of the service sector.
Service sector companies also remain optimistic about the future. The service providers surveyed expect further growth in production and turnover over the next 12 months.
Meanwhile, the latest data also revealed that service sector companies were successful in completing the pending works quickly. The volume of uncompleted work declined for the third time in the past four months, although the decline was limited, leading to a slight slowing of employment growth during October.
The report also mentioned that inflationary pressure in the services sector was less than that in the manufacturing sector. This indicates that the service industry is in a relatively better position in terms of cost control and this may also provide relief to consumers in the coming months.
–IANS
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